Too big to give a damn

There is a reason that liberal Democrat Elizabeth Warren was elected Senator from Massachusetts, and liberal Independent Bernie Sanders came thaaaat close to being the Democratic nominee for President.  That reason is they exposed the massive hanky-panky going on in America's corporate suites, and it struck a nerve with voters.  Here's the latest scam just made public:  

Wells Fargo Bank, considered by many investors to be the Gold Standard for banks *a rather low bar* because of their great management, was fined $185,000,000 by the Federales for securities fraud.  It seems Wells Fargo regional managers gave their branch offices daily quotas to “cross-sell” financial products to existing customers. If someone had a checking account, they would sign them up for a savings account. Or a credit or debit card. Or online banking services.  Former CEO Dick Kovacevich invented this target for each customer, calling it the “Gr-eight initiative” — eight add-on products per household.

When some employees couldn't meet their quota, they would just forge signatures and open up accounts without their customer's knowledge or approval.  These 1.5M unauthorized accounts only netted Wells Fargo about $2.5M, so the $185M fine might seem rather punitive, right?

Umm, no.  Here was the real scam:  Wells Fargo constantly bragged in its earnings statements that their "cross-sell results are proof of their superior customer satisfaction."  Investors loved it, thinking the sky was the limit.  Yeah, right.  (The average Wells Fargo retail banking customer had 6.11 products by the end of 2015.)

The fake accounts goosed the stock price....Wells Fargo stock doubled from 2011 to mid-August 2015, the period described in the fraud complaint.   And just coincidentally, John Stumpf, the CEO of Wells, received $155M in stock options between 2012 and 2015 as the share price soared, in part based on the successful cross-selling strategy.  (This is why it was "securities fraud" and not simple "consumer fraud". The investors, not consumers, were the big losers.)

Wanna give 'ol Liz and Bernie heartburn?  Remind them that the executive who oversaw the WF banking unit the entire time those millions of fake accounts were opened is now “retiring” with a $124.6M Golden Parachute, and the 5000 employees who did bad were fired.  Sound fair to you?

I'm a staunch capitalist.  I believe those who work the hardest and come up with the best ideas benefiting both investors and consumers should do very well.  When Fred Smith turned his doctoral project into the reality we know today as FedEx, I think he deserved to get filthy rich.  When Steve Jobs and friends invented a revolutionary new iWorld, I think they deserved to get filthy rich.  The same for Bill Gates and Jeff Bezos and a few others, too.  

But the financial services industry has proven time and again they are all about smoke and mirrors, and little else.  They seem to be masters of just fleecing those who actually do contribute to the creation of real wealth.  They deserve our contempt.  Liz and Bernie just saw the truth before most of the rest of us did.

S

Not sure what to think of this one....

Sacre bleu!

I read in ze news that the French Senate has unanimously passed a bill that says online booksellers (read: Amazon) can offer consumers either a 5% discount or free shipping, but not both.

My first reaction was, "Why would the French government not want their constituents to get the best deal they could?"  Why, that's just downright un-American!  Umm....wait....

But then I realized they're just trying to keep the smaller booksellers from going out of business.  They're just trying to save jobs.  Hmmm...

But....but....free enterprise....the market....   

It's a real conundrum for sure.  Of course entrepreneurs should be encouraged to bring their new ideas to market.  What if the old school had tried to stifle Thomas Edison or Henry Ford or Steve Jobs?  But at some point you have to wonder how far this should go.  

It's one thing to keep the competition on their toes, but if pricing becomes so predatory (prices so low, sometimes at or even below cost....at least until they get a near-monopoly) they force the smaller competitors out of business entirely, is this really in the consumers best interest?

I think we're now seeing that airline consolidation in America is going to work against the consumer.  (Check fares on the "low cost" carriers.  They're not so low any more.)  It will be great for the airlines and their stockholders, but consumers will pay more.

And now that just 5 big banks control the majority of the banking biz, do you see yourself getting better service or lower fees?  When is the last time you got a free toaster from a hungry bank wanting to gain market share?  Their attitudes sure changed, didn't they?

Major appliance manufacturers are worried, too. That's why, contrary to popular opinion, the big box retailers (Home Depot, Lowe's) do NOT get better wholesale pricing than the mid-sized retailers.  They know that if the big boxes get better pricing and put the smaller guys out of business, then the 2 boxes will in effect "own" the manufacturers.  The manufacturers don't want to lose control.

So more competition is good.  The government should just butt out and let the market do it's thing.  And less competition is bad.  The government should step in and make sure the big don't get too big.  (Don't kid yourself.  Our anti-monopoly regulators are not at all pro-active.)

DOH!  See, conundrum.  We don't live in a black or white world anymore.  Think about it.

S

"Mr. Watson, come here."

These were reportedly the first words Alexander Graham Bell spoke into his new invention, the "tele-phone", back on March 10, 1876.  As I've read that Mr. Bell was quite a player back in his day, I'm guessing when Watson showed up he said, "Check this out, bro.  I took it with me to The Watering Hole last night....chick magnet! "

In 1966 I was in the AT&T pavilion at Disney Land where the demonstrator lady held up "the phone of the future" and asked, "see anything unusual about it?"  It had NO WIRES!  Whoa!

Fast forward to April 3, 1973.  One Mr. Marty Cooper, a techie at Motorola, called his buddy Joel Engle, another techie working for AT&T, and said, "Suck it Engle.  I'm calling from the world's first completely portable mobile phone.  It's gonna be a real chick magnet.  I win."

And that's where it all began.

As I recall the first dilemma was whether to get a bag phone with more power and better range....

....or a less powerful but much cooler looking brick phone.

I remember my friend Jim Williams had a very early mobile phone installed in his truck.  It had a box the size of a computer tower (remember computer towers?) behind the seat, an antennae on top of the cab, and a handset....with a cord.  He was considered a complete nerd in his day.  And a rich nerd because it cost over 2 Grand.

I was a late bloomer.  I didn't get my first cell phone until the early 90's as best I can remember.  It looked something like this:

I remember I had it about a week before I ever talked on it because I was afraid of going over my minutes.  I would pull it out and show friends, flip it open and show off the lighted keypad, then very carefully replace it in it's belt-mounted case.  Smokin' hot!

I especially liked it when my wife called me when I was at the grocery store and told me to get such-and-such while I was there.  This was significant because she once called the office at Tom Thumb (the grocery store) and asked them to get word to me to pick up something she remembered she needed.  

They fired up their PA system and announced, "Customer Scott Park....customer Scott Park....your wife wants you to get some butter and some cream cheese, too."  (True story!)  I couldn't find a hole deep enough to crawl into and hide.

Here it is today 40 years (this week) after Marty called his buddy and razzed him, and now there are six billion cell phones in the world.  I was wondering how that could be as there are only six billion people in the world, but then I saw this....

and this....

....so I guess it's possible.

Then came the smart phone duel between Steve Jobs and Kimchee Samsung*.  I have an ancient iPhone4, while K has a Samsung Galaxy #?.  She says hers is better, but I'm used to Apple and afraid of change.  The new Samsung is out now and Apple's next new version is expected to be out as soon as June.  And I'm due an upgrade.  Decisions, decisions.

See what you've done Marty?

S

*Not his real first name, but it was the only other Korean word I knew.

Vietnam 1, USA 0

When I shop now I pay close attention to where things are made, looking for an alternative to "Made in China".  Over the weekend I looked for a new vest, but found a grand total of 0 made in America.  The one I eventually bought was made in Vietnam.  At least it wasn't "Made in China", but really, is there any difference?

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I read a very interesting article over the weekend about why the USA has such a hard time competing in the new global economy.  The story began with President Obama asking Steve Jobs (this conversation was in February, 2011) what it would take to get Apple to bring their production back to America?  Jobs replied, "Sir, those jobs aren't coming back."  Then it goes on to describe in layman's terms why.  (It describes one electronics assembly factory, Foxconn City in Shenzhen, China, where 230,000 employees work 12 hour shifts, 6 days a week, many living on-site in company dormitories.  If they get a new client they can hire 3,000 new employees overnight and begin work immediately.)  It was a real eye opener.  It's a long, but worthwhile read.  You can read it here if you're interested.

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Over the weekend Mr. & Ms. "W" moved in to the new home we just finished building for them.  Their big crisis was that the movers stole Ms. W's purse.  Besides the obvious money and credit cards inside, her purse also contained ALL the keys to their new home.  They had a locksmith come out and re-key all the locks, paying him the emergency / weekend price of $800.  I'm thinking it should have cost a fraction of that, but the guy pulled up out front and saw their $1.3M house and had an instant price increase.  (I think they got robbed twice this weekend!)  Then to rub salt into the wound, when the cops got there, they found the original keys!  The crooks tossed 'em.  

Looks like I'm playing Suzy Homemaker today.  I need to make an appearance at work, but I should still be home by early afternoon.  To give K a break I'm going to wash clothes and clean out the refrig. I can't imagine doing that full-time, like my mom and most mom's of the 1950's did.  I'm afraid my brain would atrophy.  

Gotta go.  Fabric softener awaits.  ;)

S

All Hail King Steve!

"Latest figures from the US Treasury Department show that the country has an operating cash balance of $73.7bn.  Apple's most recent financial results put its reserves at $76.4bn." (BBC News)

Isn't the solution to the deficit/debt ceiling crisis obvious?  Fire all the politicians and let (Apple CEO) Steve Jobs fix things.  ;)

S

Hell is frozen...pigs are flying...

...and one of the world's preeminent technological Neanderthals (that would be ME) now has an iPhone.  Unlikely as all those might be, I know for a fact the last one is true, so I'm sure scientists will soon be holding a press conference to announce the first two also.


My anniversary with Verizon finally arrived which entitled me to a subsidized iPhone.  Actually I tried a couple of months ago but found that my brother had "appropriated" my upgrade, so I had to wait for his upgrade to come due.  (Patience sucks!)


My new gadget is actually pretty intuitive.  I think Mr. Gates could learn a few things from Mr. Jobs.  Although I know I'll never learn (or use) all the capabilities of an iPhone, I know enough right now to make it a viable business tool.  And if I were into electronic games I could make this thing smoke.  Wow!  The apps available are unbelievable!  


Oh....but you already knew all that.  I guess Mr. Neanderthal is just easily amused.  This, however, does NOT amuse me:

S