lol

I think this is where I step away. You don't understand, I have tried, BAIDS is murdering you in plain daylight, and you don't get it. I give up.

lol

wells fargo stock is down $24 billion over two weeks

ya but if this mattered then where is the material damage to their stock price guiz

Yes, WF and all indeed of our major institutions are not nearly as competent as you would think/hope. This is why Donald Trump is able to belittle and mock all of them so easily while being a world class idiot himself. Sad, but true.

Regarding Baids posts and pictures,

WF is actually doing even better than they suggest considering they had all these fraud accounts not using debit cards and generating POS revenue


They've also fired a bunch of counterproductive employees and realized how dumb their incentive system is, seems like a buy.


Also, dat market cap and profit

No, the attacks are usually along the lines of, "It's funny how the one suggestion you have to help the poor also directly helps Thay3r."

Agree that BAIDs has posted relevant information. But must be a double murder, because you just got smoked yourself after getting lost in your emotions.

Its not fair that these people that got defrauded got away with the fraud!

If what Hoya was saying is true you would have expected a massive drop as soon as the news broke.

also lol is that these accounts have been non-performing since approximately 2011 to 2013, I somehow doubt that investors in September of 2016 have suddenly realized that these accounts won't ever perform

"WHY ISN'T THERE A GIGANTIC CORRECTION TO THIS BRAND NEW REVELATION?!?!?"

Answer: "Because it's not new, because the fine is the conclusion of the potential liability, and because the fine is a literally irrelevant amount of money."

"BUT LOL IF IT'S ALSO FRAUD ON INVESTORS THEY SHOULD CARE AND YOUR ARGUMENT MAKES NO SENSE!"

Answer: "What? And why? Investors are trying to make money. Investors now have proof that this fraud is no longer a liability. Wells Fargo will only plummet in value if customers flock to competitors. Customers have only had about a two week news cycle to do this. It is premature to conclude that this fraud was irrelevant to investors because we can't know if customer loss has been priced in, or if it will happen, or what the risk of it is. However, it is easy to demonstrate that investors already knew approximately everything there is to know, including that these accounts don't generate revenue. That did not change recently."

"BUT LOL IF IT MATTERED TO INVESTORS IN 2011 THROUGH ~ 2014 THEY SHOULD STILL CARE!"

Answer: "Why? The present-day valuation of Wells Fargo priced this in for years before today. The agreement doesn't admit guilt, and charges them virtually nothing. This has no negative impact on Wells Fargo's underlying business model - the only thing it can't do is this specific, no-revenue-generating species of fraud."

"BUT, BUT, BUT IF IT DIDN'T MAKE MONEY IT WASN'T AN EFFECTIVE FRAUD AND THEREFORE IF IT DIDN'T ACCOMPLISH ANYTHING WHY DO IT?"

Answer: "How do you know it didn't improve WF's stock price over time? How do you know that all frauds work (they don't)? Why did WF advertise it's account growth vis a vis its purportedly inferior competitors if this was an irrelevancy? Indeed, please explain in detail why investors would disregard audited statements of account growth that beat competitors. The burden rests on your side."

thay,

first image shows a (presumably part-fraudulent) increase in customers signing up for checking accounts

second image explains why an increase in customers signing up for checking accounts is gonna be good for business given that historical figures show that this flavour of customer is more valuable than the ****bag type of customer who doesn't use WF as their primary checking account bank

third image shows WF attracting more of this up-market brand of customer than their two primary competitors

fourth image should show an excited investor plonking down money to buy WF stock on the back of this (imaginary) future revenue

Unless you guys want to tell me that Wells Fargo also lied in public disclosures about the performance of these accounts, so investors for the last 5 years always believed that these accounts were performing. That would be an interesting twist. It didn't happen, though (or isn't being reported).

the defrauded ppl are the ones who bought WF stock on the back of fraudulent numbers

the ppl who benefited are the ones who already owned stock (eg the ceo)

as it turns out, the fraud was uncovered and the ppl who benefited are no longer benefiting. if it hadn't been unconvered, they'd still be benefiting.

How would these investors have known this fraud was going on before the results of their internal investigation were announced?

Well actually there are two distinct sets of victims.

1. Banking customers with fake accounts who were charged fees or reported for fake delinquencies and suffered negative credit adjustments.

2. Investors who relied upon audited disclosures that contained demonstrably false information.

I have no idea what pwn is even trying to say with his comment about the victims getting away with fraud, it's a pretty incoherent barf.

They wouldn't know it was fraud. They would know the accounts don't generate revenue at the rate other accounts do, at least in principle. Because every disclosure the bank made would have to include disclosure of the existence of these accounts and, lumped in with the analysis of the bank's performance, they would factor into the actual revenue generation / account of the bank. They would have a somewhat negative effect on the revenues per account metric, if anyone bothered to consider it.

This would be presented as advantageously as possible, but I SINCERELY doubt WF would just lie and say the accounts are ACTIVELY generating significant fees.

Thus, it is not new that these accounts are not generating meaningful fees. "Serious" investors of the CDL ilk would already know the revenues per account per product of WF.

What is new is the reason for this low-performing blip. The reason doesn't change the performance. It's been the same for years.

All I am trying to say is that I don't believe 2. Investors are victims because I don't think this fraud was large enough to meaningfully impact the overall enterprise value of Wells Fargo in a substantial way.

I think anyone who spent a tiny bit of time investigating cross sold products would see very little value being created and would therefore not weigh it highly when considering investing in Wells Fargo.

If an investor did decide that these cross selling services were the bee's knees, and made Wells Fargo a more valuable company by a significant amount, it seems awfully lol to me.

Do you understand that not every investor in the market is a hyper-analytic quant with 12 hours per day or more to crush the granular analysis of every single stock available?

That's the reason for regulation.

Therefore, if these accounts were so insignificant, it seems incredibly unlikely that 7 figure executives were involved in their fraudulent creation.

1) CP, again, the cost in additional low-level employee compensation alone likely exceeded the fees generated by these ghost accounts, which were negligible. Like we are talking hundreds of thousands of dollars here. Thus, this is not a benefit to investors nor is it a benefit to top management. Certainly not one that incentive management to participate in massive fraud

2) You offered an alternative explanation. Okay, the accounts aren't generating profits so why else would the CEO go along with this??? Hmm, if he shows 2 million new accounts on his 10-Ks, etc. this will make investors think they WF will generate alot more profits in the future, which will make the stock price go up, and benefit the CEO because he owns stock. That is the motive!

3) LL/CDL says that these accounts are so inconsequential to WF's overall business that investors don't pay much attention to them. Therefore, your alleged motive does not make sense. Further the stock price not moving much after the fraud was revealed is proof that investors didn't care.

4) BAIDs uses logic and reason to offer proof that they did try to influence stock price with these numbers and says that the stock price DID go down.

CP on the other hand says, I agree the stock price DID NOT go down and that is what makes this so terrible. The investors realized that crime does pay. This does not comport with the reality that any reasonable incentive for management to commit fraud rests on #2 above and not #1.

their investor relations report and 2015 annual report is sopping wet with references to primary checking customer account growth. looks to me like it's an important focus wrt their retail banking strategy

this is presumably the reason that staff were so heavily incentivised/bullied into getting people to open checking accts, so much so they started committing fraud

question: why would they focus on primary checking customer account growth so much if it dont matter

i'm rephrasing LO's point here

oh my god, why are we back at CDL 2 hours ago?

"If an idea is bad or fails, no one who matters had anything to do with it."

They are NOT insignificant. They MAY BE insignificant to the very best and most aware investors. That is not everyone. The bank's promotional disclosures trumpeting it's incredible ability to cross-sell in a manner superior to every competitor is not irrelevant to all investors. It also takes a long time to realize that this advantage is not bearing fruit.

Also, the creation of these accounts was MADE SIGNIFICANT TO EMPLOYEES AND MANAGERS as a matter of COMPANY POLICY. Why, Larry? Why would company policy strongly incentivize the sale of large numbers of banking products that have no hope of performing? When the bank internally realized that it had this weird uptick in non-performing existing-customer accounts, why didn't that alarm anyone FOR FOUR YEARS?

It would be hard to NOT notice that the bank has 5% more non-performing accounts than it did, or even 2%. Who noticed? Did anyone ask why this was happening? Was the narrative that existing customers are suddenly opening accounts to immediately default because of the economy?

Come on.

No. CDL and Larry clearly want to know why the sky hasn't fallen and obliterated Wells Fargo. It hasn't. I am aware that the stock is down approximately 9% from ~ Sep. 2 to today. It's also up ~ 5% from late June to today. The stock has suffered minimally, not at all, or ZOMG 9%, depending on window.

I am correct that the correction to this point is negligible. It may in the future be enormous, but that's extremely unlikely.

Regardless, from context, I would think you would realize (1) I am responding to the insane demand that the only way I'm right is if Wells Fargo crashes, which is lol, and (2) in comparison to that demand, the stock has not meaningfully depreciated.

And that's all setting aside the abject idiocy of trying to extrapolate the impact of this fine directly from the stock price over a nearly meaningless 2-week window. All of you know that's insane.

I think my biggest issue is this whole thing strikes me as so completely idiotic and aggressively hostile to your customers that I refuse to believe it could be a mandate from the top down.

Anyone with half a brain has to know this is a house of cards.

I can't believe bank execs are this willfully terrible.

Maybe I have too much faith in people.

WF stock since the news broke



looks to me like der markt has reacted poorly to finding out that 2m checking accounts dont actually exist. but idk im not an expert in these matters. thats about $20bn gone poof btw

i think some of it will be down to PR woes. some of it will be down to WF being FOS