Wells Fargo Fires Head of Consumer Lending

In a sign of just how tense the culture at Wells Fargo has become, the bank fired Franklin Codel, head of the bank's consumer lending for making disparaging comments about regulators to a subordinate. Earlier this year, Mr. Codel terminated the employment of Greg Gwizdz, who worked in the mortgage lending operation of the bank as the head of the…

Business News

Wells Fargo Fires Head of Consumer Lending

In a sign of just how tense the culture at Wells Fargo has become, the bank fired Franklin Codel, head of the bank's consumer lending for making disparaging comments about regulators to a subordinate. Earlier this year, Mr. Codel terminated the employment of Greg Gwizdz, who worked in the mortgage lending operation of the bank as the head of the national sales team, overseeing nearly 8,000 loan officers. During the conversation, Codel disparaged regulators and told Gwizdz that his severance was not more generous because of regulators' crackdown on so-called…

Berkshire Hathaway Adds Again to Apple Stake, Trims IBM

In a new 13-F filings with the Securities and Exchange Commission, Berkshire Hathaway revealed last night that it once again upped its bet on Apple, the worlds most valuable publicly traded company and continued reducing its stake in IBM. Berkshire Hathaway now owns 134 million shares of Apple worth $22.6 billion. That is equal to 2.6% ownership of the company. About 3.9 million shares were added in the quarter at a cost of about $460 million. At the same time, Berkshire sold down its stake in IBM at a relatively…

Senators Seek to Ease Financial Regulations

Since post-financial crisis regulations were put in place, numerous banks have complained that it has limited their lending and made them less profitable. Now, a bipartisan agreement on rolling back some of those regulations may give the same banks exactly what they have been looking for. An agreement by Senators from both political parties in the United States released Monday focused on giving relief to smaller banks, who have a more difficult time employing large compliance departments and whose safety is less critical to the stability of the broader economy.…

General Electric Refocuses in the Wake of Investor Dissapointment

In May of 1896 the Wall Street Journal debuted its index of twelve smokestack stocks that was designed to track the broader stock market in the United States. It would become the Dow Jones Industrial Average. Among the companies included was American Cotton Oil, its ancestors today are part of Unilever; American Sugar, now a part of Domino Foods; American Tobacco, the Lucky Strike owner which eventually became Fortune Brands; Chicago Gas, living on as part of Integrys Energy; Distilling and Cattle Feeding, part of Diageo now; National Lead, it's largest paint…

A Disgraced Harvey Weinstein and a Business Empire in Tatters

It was only a brief time ago that Harvey Weinstein was seen as someone with an aggressive management style, but one that got results for the actors and actresses in his movies and the investors in the companies that he has run, including the one that now bears his last name, The Weinstein Company. A recent analysis by Quartz showed that he was personally thanked in Oscar acceptance speeches 34 times between 1993 and 2016, the same number as "God." Exposes by The New York Times and The New Yorker…

Under the Hood of Berkshire Hathaway’s Pilot/Flying J Purchase

Berkshire Hathaway announced last week that it is buying truck stop and gas station owner Pilot/Flying J in a multi-step transaction that will see Berkshire initially acquire 38.6% of the company and then up their ownership to 80% in 2023. After 2023, the Haslam family will continue to own the remaining 20%. The Knoxville, TN based company is the fifteenth largest private company in the United States, with revenue of about $20 billion. Terms of the deal were not disclosed, forcing the curious to see if they can somehow reverse…

Economics News

House Republicans Step Up Effort on Tax Bill

In a year of legislative disappointments, House Republicans are hoping that getting a package through Congress that reforms the code and cuts taxes will finally give them an accomplishment to hang their hats on. While key members are stepping up the push to get the bill passed, it has also been disclosed that a repeal of the individual mandate will be in the proposed legislation. House leadership is targeting this Thursday for the crucial vote. If the bill does pass, it would then go to the Senate and likely take…

Lies, Damned Lies, and Statistics: Phil Gramm and Michael Solon Edition

The popular aphorism that is commonly attributed to Mark Twain is a reminder that anyone can prove almost anything by incorrectly citing figures. The most recent example of this in practice? A recent op-ed post in the Wall Street Journal by Phil Gramm and Michael Solon entitled "Finding America's Lost 3% Growth." Gramm and Solon argue that historically the American economy had had real growth of 3% for decades and that without this level of growth the American Dream can no longer be a reality. Pinpointing the root the of…

No More Easy Choices: The Death of the Phillips Curve?

"An economist is someone that will know tomorrow why the things he predicted yesterday didn't happen today." - Lawrence Peter "There are no easy choices. Easy choices are long gone." - Alan Greenspan The issue of causation is among the most difficult to grapple with in the social sciences. That's because all of us are inclined to see patterns and when we notice that two things are happening at the same time, human nature presumes the relationship will perpetually continue. Of course, it is possible that what we actually observed…

Stanley Fischer Resigns from Federal Reserve

Stanley Fischer is retiring from the Federal Reserve. The vice president of the United States central bank said he was resigning for personal reasons, according to the letter he has sent to President Donald Trump. His resignation, which will be effective on October 13, is announced at a critical moment in the direction of monetary policy in the United States. The president is deciding whether to renominate Janet Yellen as the Chair of the Federal Reserve, whose term expires at the end of January. Fischer's resignation leaves one more vacancy to fill…

Australia Q2 GDP Growth at 1.8%, While Household Savings Declines

The Australian economy expanded by 1.8% in the second quarter versus the previous year, compared to 1.7% growth in the first quarter, indicating that the commodity dependent Australian economy is continuing to chug along at a moderate rate of growth. The 1.8% increase was in-line with economists expectations. Beneath the surface, some worrying signs for Australia continue to appear. For one, the terms of trade declined by a steep 6% compared to last year. Terms of trade measure the ratio of export prices to import prices and indicates that the…

The Benefits of Trade Finance for Exporters

Unknown to many, trade finance is one of the most historic types of finance; originating since 3000 BC, where the first Babylonian clay tablets were discovered, inscribed with what is now termed a Letter of Credit, or Promissory Note. Fast forwarding to today, over US $3tn of trade is done per year (and this is growing, Chart 1) and much of this is financed through ‘Open Accounts’. Open accounts are built on the premise that a seller or distributor will pay for the goods 30-60 days on receipt of them,…

Equities

How Do You Know When You Can Buy Equifax?

Wall Street has the most inane and stupid aphorisms on the planet. "Buy low and sell high." Such sage advice. Another one is "don't catch a falling knife." No? Then how can I buy low? The truth is that making a decision on whether to purchase shares in a company that has been recently tarnished is one of the toughest investors make. Are you picking up a great company at a discount or merely buying another Valeant on the way down? The recent troubles of Equifax make for a very…

Separating Your Politics From Investing

Investing is a contrarian game. The only way to win in the long run is to see things that others have missed, finding the value in places where it has been ignored. It is certainly based on sets of objective criteria, but also comes down to the human judgment of how to weigh multiple and complicated factors and is, therefore, an ultimately subjective endeavor. New investors are taught to "buy what you know." This was especially en vogue during Peter Lynch's heyday in the 1990s. The advice is not strictly…

Exor Shares Not Reflecting the Run-Up in Fiat Chrysler

Exor, the holding company for the Agnelli family in Italy, has seen some major changes to its portfolio in recent years including the sale of commercial real estate broker Cushman and Wakefield and the purchase of reinsurer PartnerRe. The fortune of the Agnelli's was made through Italian car manufacturer Fiat. Exor still owns 29.2% of Fiat Chrysler today. Not long ago, Ferrari was spun-out of Fiat Chrysler, giving Exor a 22.9% stake in that company as well. Other interests include CNH Industrial, The Economist, and the Juventus Football Club. Fiat…

Eight Years Into A Bull Market: How Much Longer Do We Have?

An amusing video has recently made the rounds on social media of an MSNBC interview by Ali Velshi and Stephanie Ruhle interviewing Brad Thomas. Velshi and Ruhle have had long careers as financial journalists, with Velshi spending time at CNN and Ruhle at Bloomberg prior to pairing up at NBC. Thomas used to be a real estate developer and wrote a 2016 book praising Donald Trump's business record called The Trump Factor. He contributes to Forbes magazine and was on the advisory board of Donald Trump for President. Obviously, all three people have more…

Commodities

Gas Prices Set for Temporary Rise

The battering of the U.S. Gulf Coast is shutting in at least ten refineries, which could drive gas prices up sharply. U.S. gasoline futures for September delivery are currently trading at $1.79, up from a recent low on August 17th of $1.55. Retail gasoline prices are hovering at $2.51 per…

IEA Sees Rebalancing Oil Market

In a report released today, the IEA said that global oil markets are recovering due to steady growth in demand, but that a return to stability has been hampered by non-compliance with quotas among OPEC members, particularly Algeria, Iraq, and the United Arab Emirates. Non-OPEC countries are also continuing to…

M & A

Under the Hood of Berkshire Hathaway’s Pilot/Flying J Purchase

Berkshire Hathaway announced last week that it is buying truck stop and gas station owner Pilot/Flying J in a multi-step transaction that will see Berkshire initially acquire 38.6% of the company and then up their…

GE Sells Industrial Solutions Business as New CEO Marks New Direction

General Electric announced that it reached an agreement with Swiss industrial company ABB to sell its industrial solutions business for $2.6 billion. The division, which supplies electricity suppliers, was one of the original cornerstones of…

Tronc Picks Up New York Daily News

Mort Zuckerman's twenty-five-year ownership of the New York Daily News is ending as the struggling newspaper announced it was being purchased by tronc, the owner of The Los Angeles Times and Chicago Tribune. "We are…

Gilead Finally Pulls Trigger on Acquisition

Working through growth concerns, biotechnology company Gilead Sciences finally did what everyone was waiting for them to do: make an acquisition. The target is Kite Pharma for which Gilead will pay $11 billion to acquire.…

Fairfax Financial’s Brilliant Deal to Sell First Capital

In a surprise move, Fairfax Financial announced a deal to sell its Singapore division, First Capital, to Japanese insurer Mitsui Sumitomo Insurance Company for $1.6 billion. First Capital is one of Fairfax's crown jewels and…

AT&T – Time Warner Deal Heads for Home Stretch

Mexican regulators have given their seal of approval to the pending acquisition of Time Warner by AT&T. The approval was expected and means that the United States, Brazil, and Chile are the only remaining countries…

Unemployment

U.S. Employment Growth Weakens in May

The United States economy created 138,00 jobs in the month of May while the unemployment rate ticked lower from 4.4% to 4.3%. The job growth was somewhat disappointing and falls short of the number needed to grow the economy in the long-term. In April, 174,000…

US Non-farm Payrolls Increase by 211,000 in April

After a tepid March report, US employment accelerated in April with 211,000 jobs created according to the Bureau of Labor Statistics. The unemployment rate fell to 4.4% from 4.5% in March, a historically low rate of unemployment. The last time the US unemployment rate was…

General Motors Set to Layoff 625 Employees Amid NAFTA Waves

Reports indicate that auto maker General Motors is set to layoff over 600 employees in an Ontario plant amid recent news regarding the NAFTA agreement. Experts say the reasoning for the layoffs can be pinned directly to NAFTA and the movement of jobs away from…

US jobless claims fell to historically low level

The number US jobless claims fell last week, supported by the historically low level of cuts, suggesting that the labor market continues to tighten. The number of applications for unemployment benefits fell by 15,000 to a seasonally adjusted 234,000 in the week to January 14,…

Amazon (NASDAQ: AMZN) Touts 100,000 New Jobs in Announcement

Online giant Amazon (NASDAQ: AMZN) has announced news about adding up to 100,000 new jobs across its organization in a statement recently released. Positions would be spread across many skill levels and locations in the USA where the company is building more centers for distribution.…

Inflation

Swiss Inflation Perks Up in August

Prices in Switzerland increased by 0.5% from the year before in August, according to the Swiss Federal Statistical Office. That is an increase from the 0.3% rise in July, but still well within reasonable levels. The Swiss economy has been in deflation since 2011, although…

South Africa Reports Tamer Inflation

South African consumer inflation fell to 4.6% year over year in July, data released today showed. That's the lowest rate of inflation in the country since 2015 and compares to a 5.1% year over year rate in June. The biggest contributors the lower rate were…

May Wholesale Prices Unchanged in U.S.

Wholesale prices remained unchanged in May according to the Labor Department. It had risen by 0.5% in April and despite being unchanged in May from the previous month, the reading was 2.4% higher than a year ago. Energy and food prices were particularly weak in the…

Growth

Lies, Damned Lies, and Statistics: Phil Gramm and Michael Solon Edition

The popular aphorism that is commonly attributed to Mark Twain is a reminder that anyone can prove almost anything by incorrectly citing figures. The most recent example of this in practice? A recent op-ed post in the Wall Street Journal by Phil Gramm and Michael Solon entitled "Finding America's Lost…

Australia Q2 GDP Growth at 1.8%, While Household Savings Declines

The Australian economy expanded by 1.8% in the second quarter versus the previous year, compared to 1.7% growth in the first quarter, indicating that the commodity dependent Australian economy is continuing to chug along at a moderate rate of growth. The 1.8% increase was in-line with economists expectations. Beneath the…

Moody’s Sharply Revises Polish Growth Forecasts Higher

New York based credit rating agency Moody's just said that its estimates of GDP growth in Poland are now sharply higher than their previous estimate, at 4.3% up from 3.2%. Strong domestic demand and successful fiscal consolidation aided in the strong growth this year, according to Moody's, which also said…