FED Finally Smacks Down Some Banksters

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The Federal Reserve is prohibiting Wells Fargo from growing any larger than its total assets as of the end of 2017 until "sufficient improvements" are made. The Fed, acting under outgoing Fed Chair Janet Yellen, cited "widespread consumer abuses." As a result, Wells Fargo plans to replace three directors by April and a fourth by the end of the year. Wells Fargo President and CEO Timothy Sloan said in a separate statement that the order is unrelated to the bank's financial condition, which remains "strong."

zero hedge

As the release explains, in recent years, Wells pursued a business strategy that prioritized growth over managing risks and offering sufficient oversight of the firm's lending practices. As a result, the firm cheated customers of its auto-lending division and also overcharged some mortgage borrowers. And that was AFTER the cross-selling scandal mentioned above. The bank is also facing a criminal probe into its foreign-exchange desk, which allegedly overcharged its large corporate clients. The firm also lacked "an effective firm-wide risk management framework in place that covered all key risks."

About damn time. The FED and the Department of Justice shouldn't just be stopping this institution from growing but should be seizing assets and perp walking officers, right as it yanks this bunch of thieves charter.

I don't think this action truly goes far enough, and would like to see the DoJ involved, but hell it's more than anything that happened after Bush bailed these bastards out, and the Obama administration did nothing to reign them in leading to the actions today.

I'd say that we now know part of the reason that the market tanked today.

put options on Wells Fargo?

also I didn't know the Federal Reserve had that kind of power.

The FED is just making a show of its fangs.

It will try anything to delay the inevitable spotlight that President Trump is going to shine upon them.

I wonder how the MSM will report when the first cry goes out to audit the FED.

Good job for Trey Gowdy.

P

a reply to: jefwane

Looks like the Fed needs some more former Wells Fargo executives on their payroll.

And why is the Fed getting in the way of the free market?



/sarc

originally posted by: jefwane
I'd say that we now know part of the reason that the market tanked today.

It's a good guess, but more likely the fed is saying no more leverage. That was really the issue with the whole election loss by Hillary, the banks wanted her in to maintain continuity with Bill's original repeal of Glass Steagall.

Basically we have way too many banks that the economy doesn't need, too much credit. They can only make more money by increasing their leverage but we have $60 trillion in corporate personal and public debt, we're at historic debt saturation. So to increase their leverage further they'd have to play (derivatives games)^2 if such a thing is even possible.

They're just saying no more insanity IMO, that's why the markets sold off because they can't keep increasing without more leverage.

But pretty soon the bond market will tank because most of the credit shoved into the economy during zirp was used to blow the asset bubble, it wasn't invested in CAPEX or increased salaries for employees. All financial engineering that produces nothing in the real economy.

a reply to: pheonix358

"Permit me to issue and control the money of a nation, and I care not who makes its laws!"

a reply to: seasonal

Alls Fargo, that Wells Fargo!!

They are a bit too big. The stock market is overvalued. I’m constantly living in some recession or such.

Ah, death and Texas! All we have to look forward to...

/super sarc

a reply to: SkeptiSchism

I largely agree with you.

To be honest, this is the first new topic I've made in a while. I just couldn't resist after a 666 point DOW drop, and an after hour enforcement action.

The time to buy puts was this morning. The IV will spike the price on them too hard to make them worth it now, unless there are some indictments against the bank itself coming down.

a reply to: jefwane

The internals of the jobs report today sucked wind as well,

market-ticker.org...

In other words the bad news and fact is that with the adjustments (see below for an explanation) on a 12-month basis the economy actually lost 377,000 jobs when one takes into account rising population. The math on this is the 12-month change in employed people less the change in civilian non-institutional and working age population change.

market-ticker.org...

a reply to: SkeptiSchism

Ah, a Denninger reader. I saw that earlier today as well. I'm waiting to see what he has to say about the Wells action. I'm pretty sure he'll be rather unimpressed. To be honest so am I, but it's better than almost anything we've seen over the past few years.

a reply to: jefwane

Yah I used to read him every day from 2010-2012 then I sort of got frustrated and just went to ZH and a couple other websites but lately I'm going back and reading his financial posts because I figure he has a really good nose for smelling out the BS and it's about time for the markets to tank anyway.

Remember the CFTC pegged 6 traders for spoofing earlier in the week:

Washington, DC – The Commodity Futures Trading Commission (CFTC) today issued an Order filing and settling charges against Deutsche Bank AG (DB AG) and Deutsche Bank Securities Inc. (DBSI) (collectively, DB), requiring DB to pay a $30 million civil monetary penalty and to undertake remedial relief. The Order finds that from at least February 2008 and continuing through at least September 2014, DB AG, by and through certain precious metals traders (Traders), engaged in a scheme to manipulate the price of precious metals futures contracts by utilizing a variety of manual spoofing techniques with respect to precious metals futures contracts traded on the Commodity Exchange, Inc. (COMEX), and by trading in a manner to trigger customer stop-loss orders.

www.cftc.gov...

The Federal Reserve is prohibiting Wells Fargo from growing any larger than its total assets as of the end of 2017

Communists! The Federal Reserve MUST be Communist I tell ya!!!


Or..... why cant this happen to the 1%'er billionaires/trillionaires?

You make a certain amount annual and then the rest just 'doenst happen'.
The math is too offset right now to actually over-think this.

a reply to: jefwane

The Fed is the bigger crook of them all. A private bank telling other banks what they can do?? lol

Here's another thing to consider OP, cryptocurrencies started crashing in December-January ahead of the bond market dislocations that happened mid January. Then we got news about the CFTC coming down on some precious metals spoofers, which was obviously minimal in comparison to the general fraud in the paper markets.

But, several mints are now offering crypto-money on known deposits of gold. Soon, they'll be offering them for silver and other metals.

he blockchain has discovered gold (or gold has discovered the blockchain). Either way, this means several things. First, the decades-long dream of a gold-backed cybercurrency may finally be realized. Second, gold and probably silver are looking at a big new source of physical demand. Third, the huge number of gold-related initial coin offerings (ICOs) in this largely unregulated pipeline will require buyers to learn how to tell the legitimate offerings from the scams.

dollarcollapse.com...

Also, several states in the US have issued legal tender laws for gold and silver, this opens the door to states opening repositories and creating blockchains and crypto-money for gold and silver free of capital gains taxes and offering interest paid in silver or gold not fiat.

This is the game changer IMO, so as money leaves the hyper-inflated bond, stock and crypto-currency markets it will flow into these new crypto-money markets that are supposedly backed by 100% reserves.

Personally, I'm waiting to see if they offer full fungible exchange before I deposit any of my hard earned silver coins, but once they do that is the end of the fiat money system IMO. They won't be able to manipulate the price of silver or gold in the future's market and real price discovery will occur.

originally posted by: jefwane
About damn time. The FED and the Department of Justice shouldn't just be stopping this institution from growing but should be seizing assets and perp walking officers, right as it yanks this bunch of thieves charter.

I don't think this action truly goes far enough, and would like to see the DoJ involved, but hell it's more than anything that happened after Bush bailed these bastards out, and the Obama administration did nothing to reign them in leading to the actions today.

I'd say that we now know part of the reason that the market tanked today.

I support glass-stegall. I feel like BofA, Citi, Wells, and Chase need to be broken up. No bank should be too big too fail. I say this as someone who works in banking.

a reply to: Edumakated

Gotta cut that html from that bbcode.

Yah the best thing Trump could do is re-instate Glass Steagall as originally written but with his current cabinet including ex-GS employees I have doubts it will happen.

But he may have to do it, just like FDR had to do it to re-instill faith in the dollar.

How is Wells Fargo remaining strong, aren't a lot of people realizing what it is and bailing the ship opting for credit unions instead? Must be from the continuing fraudulent fees and more. This is overdue. However, if it is too big to fail, it will probably be absorbed by another big bank and the monster continues.

a reply to: SkeptiSchism

It's exactly what needs to be done with the act.

Will he despite his son-in-laws ties to Goldman Sachs, etc?

"Jared Kushner didn't disclose business ties to George Soros, Peter Thiel, and Goldman Sachs, or that he owes $1 billion in loans"
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Until we get price discovery in commoditites and other markets, we still lose out.