A Wells Fargo sign is seen outside a banking branch in New York July 13, 2012. (Photo: Reuters)
Wells Fargo & Co. (NYSE:WFC) posted fourth-quarter (4Q) profits and revenues of $0.96 per share and $21.6 billion, both missing the analysts’ expectations. The nation’s largest bank by market capitalization (not assets) was expected to report 4Q earnings of $1.00 and $22.45 billion in revenues.
The San Francisco-based bank has been plagued by numerous lawsuits and a declining number of newly opened accounts after it settled with regulators in September over charges that its employees created 2 million accounts without customers’ consent. Chief Executive Officer Tim Sloan said the company has taken the necessary and proper measures to reassure the markets and client base.
“We continued to make progress in the fourth quarter in rebuilding the trust of our customers, team members and other key stakeholders,” he said in a statement. “I am pleased with the progress we have made in customer remediation, the ongoing review of sales practices across the company and fulfilling our regulatory requirements for sales practices matters.”
Net income to shareholders dropped 6.4% to $4.87 billion, or 96 cents per share, down from $5.20 billion, or $1.00 per share, one year earlier. Mr. Sloan, who took over after John Stumpf resigned in the wake of the scandal, pointed to plans laid out for the future of the bank, adding inventive programs aiming at drawing in new consumers.
“As planned, we launched our new Retail Bank compensation program this month, which is based on building lifelong relationships with our customers. While we have more work to do, I am proud of the effort of our entire team to make things right for our customers and team members and to continue building a better Wells Fargo for the future.”
Bank of America Corp (NYSE:BAC), JPMorgan Chase & Co. (NYSE:JPM) all posted earnings with Wells Fargo & Co. (NYSE:WFC) on Friday, while Morgan Stanley (NYSE:MS) will release earnings on Tuesday, followed by Goldman Sachs Group Inc. and Citigroup Inc. (NYSE:C) on Wednesday.
Bank of America Corp (NYSE:BAC) posted fourth-quarter profits that topped forecasts as revenue from fixed-income trading increased and expenses dropped. The nation’s third-largest bank by market capitalization (second-largest by assets) reported 4Q profit of $0.40 per share, beating the estimate for $0.38. Adjusted revenue came in at $20.0 billion, missing the estimate for $20.85 billion.
Chief Executive Officer Brian Moynihan has been focusing on cutting costs at BOA for years even as the financial sector has had to deal with low interest rates. It’s a mid-to-long-term strategy that is now starting paying off, posting a 46.8% rise in profit.
“We had strong results in 2016 because our strategy is working. We are lending more and seeing historically low charge-offs, which is what responsible growth is all about. Revenue was up modestly, but EPS grew by 15% as we continued to manage our expenses and create operating leverage,” Mr. Moynihan in a statement. “With strong leadership positions in our businesses against a backdrop of rising interest rates, we are well-positioned to continue to grow and deliver for our shareholders in 2017.”
Revenue from fixed income trading increased by 12% to $1.96 billion, slightly missing analysts’ expectations for $2.1 billion, while equity trading gained 11 to $948 million, matching the median forecast. Total revenue increased 2.1% to $20 billion, which also fell shy of estimates calling for $20.8 billion, but expenses fell 6% to $13.2 billion, significantly more than expected.
Compensation costs also declined by 2.6%.
Still, as of 7:45 AM EST, shares were down -0.12 (-0.52%) in pre-market trading to 22.80.
JPMorgan Chase & Co. (NYSE:JPM) and Wells Fargo & Co. (NYSE:WFC) are scheduled to report fourth-quarter results later Friday, while Morgan Stanley (NYSE:MS) will release earnings on Tuesday, followed by Goldman Sachs Group Inc. (NYSE:GS) and Citigroup Inc. Wednesday.
Apr. 11, 2015: US President Barack Obama and Cuban President Raul Castro shake hands during their meeting at the Summit of the Americas in Panama City, Panama. (Photo: AP)
With only one week to go in his presidency, President Barack Obama announced he is ending the longstanding “wet-foot/dry foot” policy for Cuban immigrants. In a statement, the president said it was “put in place more than twenty years ago and was designed for a different era.”
“Today, the United States is taking important steps forward to normalize relations with Cuba and to bring greater consistency to our immigration policy,” Mr. Obama said. “Effective immediately, Cuban nationals who attempt to enter the United States illegally and do not qualify for humanitarian relief will be subject to removal, consistent with U.S. law and enforcement priorities.”
The announcement comes as the U.S. Border Patrol tells People’s Pundit Daily that scores of illegal immigrants are pouring across the Southern border in anticipation President-elect Donald J. Trump will build a wall and beef up security, effectively rolling up the red carpet that was rolled out for them under Mr. Obama’s tenure.
Cuban-Americans were a key voting bloc behind President-elect Trump’s victory in Florida, the nation’s largest battleground state. Younger Cubans, who are less likely to vote, tend vote more like immigrants from Latin America rather than older Cuban voters who remember the oppression of the Castro regime. Newly naturalized Cuban immigrants also vote more Republican than U.S.-born Cuban children, as well as the new arrivals who hold more conservative political views.
Fermin Vazquez cheers before the arrival of Republican presidential candidate Donald Trump during his campaign rally at the Bayfront Park Amphitheater on November 2, 2016 in Miami, Florida. Trump continues to campaign against his Democratic challenger Hillary Clinton as election day nears. (Photo: Getty Images)
“The Cuban government has agreed to accept the return of Cuban nationals who have been ordered removed, just as it has been accepting the return of migrants interdicted at sea,” Mr. Obama added. “With this change we will continue to welcome Cubans as we welcome immigrants from other nations, consistent with our laws.”
But Mr. Obama’s record on immigration isn’t consistent with a belief in the preservation of the rule of law. A recent review by the Center for Immigration Studies (CIS) of new data from the U.S. Census Bureau shows that 1.5 million new immigrants are settling in the country each year. While between three-fourths and two-thirds of the 1.5 million arrivals in 2015 were legal immigrants, the remainder are illegal immigrants.
With unfettered immigration levels booming, Mr. Obama ordered bureaucrats at the Houston field office of U.S. Customs and Immigration Services—a sub-agency of DHS—“to take advantage of the OT [overtime] if you can” in order to naturalize immigrants so that they could vote in the 2016 U.S. presidential election.
[brid video=”105265″ player=”2077″ title=”Dan Mitchell on the Proposal for Government to Provide a Guaranteed Income”]
On “The Intelligence Report,” CATO economist Dan Mitchell discusses Finland’s new idea to use government guaranteed income to reduce income inequality. Mitchell warned the program could reduce the incentive to work but also said he was “open minded” to the experiment.
However, while he was curious to see how the program turns out for Finland, he was glad it was them and not the United States to offer a government guaranteed income program.
President Barack Obama leans in to kiss Massachusetts senatorial candidate Elizabeth Warren after she introduced Obama before he addresses supporters during a June campaign fundraiser at Symphony Hall in Boston. (Photo: Stephan Savoia/AP)
This agenda was always a bad idea for both macro and micro reasons, and has become a very bad idea because of demographic changes.
But now the left has expanded its goals to policies that are far more radical. Instead of a well-meaning (albeit misguided) desire to protect people from risk, they now want coerced equality.
And this agenda also has two components.
A guaranteed and universal basic income for everyone.
Taxes and/or earnings caps to limit the income of the rich.
Taking a closer look at the idea of basic income, there actually is a reasonable argument that the current welfare state is so dysfunctional that it would be better to simply give everyone a check instead.
But as I’ve argued before, this approach would also create an incentive for people to simply live off taxpayers. Especially if the basic income is super-generous, as was proposed (but fortunately rejected by an overwhelming margin) in Switzerland.
I discuss the pros and cons in this interview.
[brid video=”105265″ player=”2077″ title=”Dan Mitchell on the Proposal for Government to Provide a Guaranteed Income”]
By the way, one thing that I don’t mention in the interview is my fear that politicians would create a basic income but then not fully repeal the existing welfare state (very similar to my concern that politicians would like to have a national sales tax or value-added tax without fully eliminating the IRS and all taxes on income).
Now let’s shift to the left’s class-warfare fixation about penalizing those with high incomes.
This isn’t a new phenomenon, of course. We’ve had ideologues such as Bernie Sanders, Thomas Piketty, and Matt Yglesias arguing in recent years for confiscatory tax rates. It appears some modern leftists actually think the economy is a fixed pie and that high incomes for some people necessitate lower incomes for the rest of us.
And because of their fetish for coerced equality, some of them even want to explicitly cap incomes for very valuable people.
The nutcase leader of the U.K. Labour Party, for instance, recently floated that notion. Here are some excerpts from a report in the Guardian.
Jeremy Corbyn has called for a maximum wage for the highest earners… The Labour leader would not give specific figures, but said radical action was needed to address inequality. “I would like there to be some kind of high earnings cap, quite honestly,” he told BBC Radio 4’s Today programme on Tuesday. When asked at what level the cap should be set, he replied: “I can’t put a figure on it… It is getting worse. And corporate taxation is a part of it. If we want to live in a more egalitarian society, and fund our public services, we cannot go on creating worse levels of inequality.” Corbyn, who earns about £138,000 a year, later told Sky News he anticipated any maximum wage would be “somewhat higher than that”. “I think the salaries paid to some footballers are simply ridiculous, some salaries to very high earning top executives are utterly ridiculous. Why would someone need to earn more than £50m a year?”
This is so radical that even other members of the Labour Party have rejected the idea.
Danny Blanchflower, a former member of Corbyn’s economic advisory committee, said he would have advised the Labour leader against the scheme. In a tweet, the former member of the Bank of England’s monetary policy committee said it was a “totally idiotic, unworkable idea”. …Labour MPs expressed reservations… Reynolds also expressed some uncertainty. “I’m not sure that I would support that,” she told BBC News. “I would like to see the detail. I think there are other ways that you can go about tackling income inequality… Instinctively, I don’t think [a cap] probably the best way to go.”
The good news, relatively speaking, is that Crazy Corbyn has been forced to backtrack.
Not because he’s changed his mind, I’m sure, but simply for political reasons. Here’s some of what the U.K.-based Timeswrote.
Jeremy Corbyn’s attempt to relaunch his Labour leadership descended into disarray yesterday as he backtracked on a wage cap… The climbdown came after members of the shadow cabinet refused to back the idea of a maximum income while former economic advisers to Mr Corbyn criticised it as absurd.
There don’t seem to be many leftists in the United States who have directly embraced this approach, though it is worth noting that Bill Clinton’s 1993 tax hike included a provision disallowing deductibility for corporate pay over $1 million.
And that policy was justified using the same ideology that politicians should have the right to decide whether some people are paid too much.
In closing, I can’t help but wonder whether my statist friends have thought about the implications of their policies. They want the government to give everyone a guaranteed basic income, yet they want to wipe out high-income taxpayers who finance the lion’s share of redistribution.
I’m sure that work marvelously in the United States. Just like it’s producing great outcomes in place like Greece and Venezuela.
Russian Defense Minister Sergei Shoigu, left, and Russian President Vladimir Putin, right.
Russian Defense Minister Sergei Shoigu, while delivering a lecture in Moscow, said the Kremlin wants to avoid an arms race and will shift its focus to conventional, precision guided, munitions. The reference to an arms race seems to be referring to President-elect Donald J. Trump’s earlier comments that the U.S. would not be left behind in such a competition.
“By 2021, we plan to more than quadruple the combat capabilities of our strategic conventional forces, which will fully meet the demands of [Russia’s] conventional deterrence,” Shoigu said, reported The Moscow Times.
Shoigu added that Russia will focus on warships and submarines to deliver these advanced munitions. Russia has recently showcased such a capability by firing sea-launched weapons from the Caspian and Mediterranean Seas at Middle Eastern targets. The Kremlin also used long-range bombers launched from Russia territory and Iran to attack the Syrian opposition and Islamic State.
It remains to be seen if the Kremlin plans to scale back the large scale nuclear modernization effort it has underway. This seems doubtful in light of Russia’s historic dependence on nuclear forces for deterrence.
This article first appeared on Tsarizm.com, news you need to know RIGHT NOW about Russia, the former Soviet Union and Eastern Europe.
Sen. Joe Manchin, D-W.V., arrives at Trump Tower to discuss working with Republicans on repealing and replacing President Barack Obama’s signature health care law, known as ObamaCare. (Photo: AP)
Sen. Joe Manchin, D-W.Va., said Thursday that he will vote to confirm Sen. Jeff Sessions, R-Ala., as the next Attorney General of the United States.
“Jeff Sessions has my vote. He’s my friend. I’ve made relationships and friendships here and I don’t care if they are Democrats or Republicans,” Manchin. “I have never detected, never one ounce of detection that he is what they’ve said.”
Sen. Manchin is referring to the accusations of racism that sunk his 1980s bid for a judgeship and have since been widely debunked. The announcement comes as Senate Minority Leader Chuck Schumer announced he would oppose the nomination and has been trying to twist arms to fall in line.
“I will oppose Senator Sessions’ nomination to serve as the next Attorney General,” he said. “I am not confident in Sen Sessions’ ability to defend the rights of all Americans, or to serve as an independent check on the next administration.”
Democrats paraded out a series of leftwing civil rights leaders to testify at the hearings on Wednesday who expressed similiar concerns in almost identical language. However, it is not an unfair characterizing of their opposition to describe that opposition as one based on him being white, conservative and from Alabama.
“It doesn’t matter how much he smiles or how nice he is,” Rep. John Lewis said in his testimony, making repeated references to the state’s history on race relations, not the record of Sen. Sessions the man.
As U.S. attorney for the state of Alabama, Mr. Sessions prosecuted and put to death the leader of the Ku Klux Klan and led the legal battle to desegregate the schools. Yet, Democratic senators have insinuated that he is harboring well-hidden racism and, as Sen. Cory Booker said Wednesday, “nothing in his record” since the 1980s indicates he has changed.
Of course, Sen. Booker was praising Sen. Sessions on the issue of race just a little over a year ago before he decided he wanted to run for president in 2020. Sen. Manchin commented that “it wasn’t the Cory Booker I know” in front of the committee.
Columnist Quin Hillyer, who has followed Sessions’ career, dismissed the criticism and charges of racism.
“Mr. Sessions has now served 20 years in the Senate,” Hillyer said. “No racist could keep bigotry closeted for so long.”
Ken Blackwell, the former Ohio secretary of state and an African American, recently wrote an op-ed calling on senators to confirm Sen. Sessions without delay.
“Of course, Democrats fear government rooted in law, but they can’t admit that in public. So they are resorting to their usual smear tactics, branding Sessions as a racist,” Mr. Blackwell wrote. “What really scares Sessions’ opponents is that the former U.S. Attorney and Alabama Attorney General really knows the issues and what is necessary to fix the DOJ, a department badly politicized by the Obama administration. Sessions also knows where the bodies are buried there, including the ones that have been moved.—and how often they vote.”
The nomination of Sen. Jeff Sessions for U.S. Attorney General is supported by every major law enforcement representative group in the nation.
Weekly jobless claims, or first-time claims for unemployment benefits reported by the Labor Department.
The Labor Department released the weekly unemployment insurance report that found claims rose by 10,000 to 247,000 for the week ending January 7. That came in lower than the 255,000 estimate, but the prior week was revised higher by 2,000 to 237,000.
No state was triggered “on” the Extended Benefits program during the week ending December 24 and there were no special factors impacting this week’s initial claims. While the report marks 97 consecutive weeks of initial claims below 300,000, the longest streak since 1970, it is also true that long-term unemployment and decreased participation has reduced the eligible pool of applicants.
The four-week moving average–which is widely seen as a better gauge–was 256,500, a decrease of 1,750 from the previous week’s revised average. The previous week’s average was revised up by 1,500 from 256,750 to 258,250.
The highest insured unemployment rates in the week ending December 24 were in Alaska (4.8), Montana (2.8), New Jersey (2.6), Puerto Rico (2.6), Connecticut (2.4), Illinois (2.4), Pennsylvania (2.4), Massachusetts (2.3), Minnesota (2.3), California (2.2), and Wyoming (2.2).
The largest increases in initial claims for the week ending December 31 were in New Jersey (+8,222), Pennsylvania (+4,448), Michigan (+3,964), Connecticut (+3,304), and Massachusetts (+3,020), while the largest decreases were in California (-14,836), Illinois (-2,347), Texas (-2,005), Washington (-1,308), and Kansas (-1,040).
[brid video=”105071″ player=”2077″ title=”WATCH LIVE Rep. Mike Pompeo confirmation hearing”]
The Senate confirmation hearing for Rep. Mike Pompeo, President-elect Donald J. Trump’s pick for head of the Central Intelligence Agency (CIA). Rep. Pompeo, 52, is a third-term congressman and was elected to the U.S. House of Representatives during the 2010 Tea Party wave.
From Wichita, Kansas, he serves the 4th Congressional District in Kansas. In addition to serving on the House Select Committee on the Events Surrounding the 2012 Terrorist Attack in Benghazi, he served on the Committee on Energy and Commerce, the Subcommittee on Commerce, Manufacturing and Trade and the Subcommittee on Energy and Power.
Rep. Pompeo’s nomination came as a bit of a surprise to some politicos, despite his background on military and intelligence issues. However, he was on the House of Representatives intelligence and energy and commerce committees, as well as the House Select Committee on Benghazi that investigated the 2012 attack on the U.S. diplomatic compound in Libya.
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