Tuesday, February 03, 2009
The people complaining that Wells Fargo ought not have a corporate function in Las Vegas because it benefited from the "bail out" are wrong. There are at least three reasons.
First, Wells Fargo never needed the "bail out." Everybody knows that Hank Paulson very forcefully twisted the arms of even the strongest banks to take the TARP funds, because he did not want the acceptance of government capital to stigmatize the banks that needed it.
Second, Glenn Reynolds is right:
But it sounds like this is actually a reward for salespeople. If you’re hurting for cash, you probably want to reward salespeople who do a good job. Or am I missing something here?
You need to do that whether or not you are hurting for cash.
Third, Vegas is actually a very cheap place to host a big meeting, sales or otherwise. It is possible for large groups to negotiate the price on lodging down to the cost of a night at Holiday Inn Express in Akron, and there are a huge number of flights from just about every other big city in the country, which makes the airfare quite competitive. All in, Vegas is a significantly less expensive to convene a national business meeting than big cities.
Wells Fargo has, in fact, directly accused the Associated Press of misleading its readers. Good for them.
Last week I stayed in Vegas at a 5 star hotel for $79 per night, rented a car for $10 (plus fees of $8) and purchased two one way tickets to and from the SF Bay Area 5 days before the trip for $140 total. Tonight I am staying in Chico, CA and paying $120 for a Marriott Suites..... Vegas is the best, cheapest, place for a meeting.
Let's sum up what Wells Fargo says about this:
1. The story is "misleading," which means, in this context, "it isn't wrong, we just don't like the way it was put."
2. This isn't a "junket," it's a "four-day business meeting." Sounds like Rangel explaining his trip to the Caribbean.
3. These events are "an important part of our company's culture." So important, in fact, that they've cancelled them for 2009.
4. The company's own press release never says anything about Wells Fargo's corporate arm being twisted about the bail-out.
Good for them, indeed.
With regard to item 4, you're not serious? Nobody will say that on the record, but every story that has come out of that meeting confirms that Paulson put the screws to Wells and JP Morgan and a couple of the other stronger banks to take the money. I have never heard anybody say otherwise.
So why doesn't Wells Fargo give me a break on my mortgage? My mortgage isn't much. Wells Fargo could write it off and use my mortgage as an example for their sales people. I need to be rewarded for paying it on time and being a good little boy.
I agree with Dave; let WF call my mortgage paid in full and I'll let up on them. Tiger, I don't care what excuse you, or any other j@ck@ss in America tries to use to explain away things like this. Bottom line; they fed from my trough, they'll accept my disdain and furor over their business practices. No means no, and if what you say is true, then I take it to mean that they were date raped? or were they wearing a really short mini skirt and deserved it?
Dance with the devil...
The Obama-Pelosi-Reid Debt for Generations Porakapaloosa is outrageous. WF taking salescritters to Vegas for a business meeting is outrageous as well. If WF wants to recognize top performers, pay them appropriately. If WF wants to have a feel-good rah-rah session, bring in some boxes of donuts and coffee, or have sundaes in the break room. If the want to go to Vegas, pay back the TARP funds, with interest.
Read what I wrote, please. The "stimulus" bill is nothing more than a Democrat spending bill authorized outside the budget process. The WF and other bank subsidizing fiasco is as big of a joke. Either we're a free market country, or we're not. Free to succeed and free to fail. I take exception with every single one of these plans to spend my money to help someone else. This is being done under the guise of "phylanthropy" and I can't get a tax deduction for it. Maybe I'll take the Democrat route, and just stop paying my taxes.
It wasn't date rape, by the way -as Tigerhawk suggested. It was full blown consentual porno flicks. Now we all get to sit back and watch the result. I'm betting it's uglier than making suasage...
To the morons suggesting why Wells isnt using its money to pay down your debt, I have an alternate response: sell the house you never should have been living in the first place, you irresponsible moron, and live within your means.
Second, to those whining about so-called corporate handouts, tell it to the WFC shareholders, who all got screwed when Paulson forced Kovecevich to take the TARP funds in exchange for preferred shares, now earning the Treasury (and, I guess you too, Joe Complainer) about a 5% annualized return. Try to find a better rate elsewhere.
The Fed walks aways with a steal, and WFC gets tarred and feathered. Brilliant.
To anon calling people morons:
1.) I was not whining for them to pay down my debt, I was making a statement about pigs who feed at my trough using my food to feed pigs from whom I will not be able to make bacon. Learn to read.
2.) So you submit that this was date rape.
You, sir, are an ID10T, who probably works for WF.
Good for Wells Fargo. I suggest everyone read an AP article about an event that you actually attend and then note if the article has any relationship to reality. I did that during a recent attempt by the leftists to force "affordable" housing into the Disneyland Resort zone. The AP wrote some fantasy story about what was happening that I know was distorted because I live right here. The AP must have interviewed dozens of out of town "community activists" and ignored what the citizens of Anaheim were saying. I will never again believe anything I read that the AP publishes unless I can get it verified by a credible source.
OMG. Can anyone stay on task here?
Tyree, nobody said that AP is credible. The only organization less credible, of which I am aware, is Reuters. What have been saying is that WF took bailout money -my money, WF is taking my mortgage payments; ergo, WF deserves any extra scrutiny that is available. They have double dipped on my money -mortgage and taxes, I am certain they didn't think there was a free ride coming with this. I don't want to hear a single date rape excuse about this. I do not care about the "long term ramifications of blighting the names of banks that take bailout money vs those that don't". I don't care. Let them all fail. The .gov isn't going to stop operating one way or another; and niether and I. You may, and that's your problem. I'm a little tired of talking with folks who have tunnel vision, so I'm done here.
My final bullet points, which I guess, to which, this all boils down:
1. phuck the .gov and them stealin thieves and their partners in crime.
2. see number one.
Banks, well run and poorly run, are missing the point. And the fact that they can't get such an obvious point makes me wonder if they can be trusted with such large deposit bases.
I think not.
The banks need to be broken up, and limited to the functions they could perform pre-1988, in essence (or at least pre-1994, but probably pre-1988).
Continuing to suppose that these buffoons are smart just because they hold positions of substantial wealth and power is just ignoring evidence to the contrary. They are idjuts. And idjuts should not be able to wreck so easily the entire economy.
Their degree of success (measured by salary, e.g.) is clearly a false positive in terms of measuring intelllect - as is too often the case. Compare Ecclesiastes 9:11 (KJV).
Dude, WF did NOT have a choice in selling the government interest in their corporation.
Other than that I'm not going to argue with you. I want people to be able to tell the difference between me and a fool.
I apologize for not keeping my word. I must respond to you, however.
So you're saying that Wells Fargo was date raped; I need some o'' dat rohipnol/meth/whateverthehellitis because it appears I've been date raped, as well. But everyone wants to ignore me and take up for po' ole Wells Fargo. What does I needs to do to get someones to take ups fo' me? I bees guessin i's needs to step my hoin' game up and starts hittin' does boys ova at da feds. every excuse maka here says dat da ole feds boys be da bad pimp guys. i's need to be gettin somba dat, since ya'lls keep callin mees a moron because I done sayed:
1. phuch the amrikan gubment
b. see numba 1
So, all of a sudden it's wrong for a super-successful company to unload a couple million dollars into a localized economy? Is anyone that is working for a living in and around Vegas have a problem with that? Frankly, this "junket", in and of itself, is more of a real stimulus package than anything yet proposed in the Fed's $900b bill.
My God! Is this what we've come to?
I say, Go to Vegas! Spend some money!
There's a new sheriff in town.
Wells Fargo's argument that it should be allowed to piss away taxpayer dollars at the Venetian (some of the priciest hotel rooms in Vegas) will fall on deaf ears.
The bank is not required to accept TARP funds. It can relinquish its charter anytime it feels like federal regulation regarding its capitalization isn't fair.
Fact is ... the American taxpayer, US, is the new owner of Wells Fargo. Their profit is being derived from OUR capital. And as THEIR NEW OWNER we are demanding, rightly, that they forgo the million-dollar office redecorations, multi-million bonuses during down years and fancy Venetian Vegas junkets.
It's OUR money. They can return it the moment they INCREASE THEIR capital in the bank by digging deep. They have a choice, and they've chosen to use TAXPAYER capital instead.
So, now we get a say in what they do. And if they don't like that they can give up their federal banking charter and go back into the Pony Express business.
I wonder if Wells Fargo can afford to pay back the "loan" from the government? Will they salt the announcement of the payback with " well, we are healthy enough to pay this back"? Will it throw the rest of the banks into turmoil?
Point is, Paulson essentially forced the money into the healthiest banks, not the weakest ones, in the hope that they would use it to lend. They are doing that. Bank lending is up, actually. The problem is, it cannot make up for the destruction of the "instituional lending" market, made up of non-bank lenders who have now had their equity, and therefore their ability to lend, destroyed. This is related to the second reason why there has been such a slow market for new debt, whether bank loans, high yield bonds, or converts: Because the non-bank lenders are liquidating, they are dumping vast quantities of healthy loans and bonds on to the secondary market (and have been since September). This forced liquidation has driven down the price of loans and bonds of good credits, which (obviously) drives the effective yields above levels that new borrowers are willing to pay. Banks are buying up old loans from liquidating non-banks rather than making a bunch of new loans, and will continue to do so until secondary markets align. That is why there have been relatively few new loans (bank lending is going up because existing borrowers pulled their lines down in the fall to hedge against the worldwide liquidity crisis, and have not returned the money because *their* rates, generally figured off of LIBOR, are so low).
In any case, Wells Fargo is not spending TARP money on the Vegas trip. The TARP money comes with a guaranteed rate of return, which Wells Fargo is able to pay and still earn a profit. It can earn this profit because it is not sucking up massive losses. That is all the proof you need that it did not have to take the expensive TARP money.
Our home here in northwest Harris County (Houston area) was badly damaged during Hurricane Ike back in September. We had to turn all of our insurance money over to Wells Fargo since they hold the note on our house, and it has been an absolute nightmare getting them to release the money so we can get our home repaired. I know many other families in our area who have had the same problem with WF. We have had to pay for most of our repairs out of pocket and wait for reimbursement, which has been very difficult for us financially, considering that we had almost $50,000 in damage. They are still holding almost $10,000 that they will not release even though we have turned in all of the correct paperwork and have had physical inspections of our home to show that we repaired our home. We even paid for an overnight mailer so they could send the check to us on our dime. I don't have any pity left for companies like WF. They have treated hurricane victims here terribly, while they earn intrest on our money. They don't want to let go of the money because it is padding their bottom line. The reason we have insurance is because we are responsible homeowners who don't expect FEMA to bail us out when a hurricane hits. We know we live in a "danger zone", so we did the responsible thing. Yet because Wells Fargo doesn't want to release the money, we can't get our house repaired. Someone tell me again why I should applaud a lavish trip to Las Vegas?
Call me naive...but why do salespeople deserve to be treated to Las Vegas (or anywhere else) junkets? I realize we're not talking about a floor guy at Sears; I know we're talking about those who travel all over the country (or world!), selling the services Wells Fargo has to offer. But still...I've always thought salespeople were employees just like you or me, and my reward for doing a good job (I fix computers) is a raise and I get to keep my job. They know what the job involves in travel and time away from family, yet they take it, and reap (fully earned) massive commisions when they make a big sale. So why the junkets?
Honestly, I'm looking for enlightenment and education here.
Sales reps, especially field sales reps who are removed from big corporate offices, need periodic training and motivation. Sales meetings serve that purpose. I have never heard of a national sales force in any industry that did not have sales meetings. They are usually in reasonably nice places, and rarely particularly lavish. In our industry, sales meetings involve long days in training sessions, usually about nine hours of classroom work, followed by awards banquets and other rah-rah in the evening. We book the facilities three years in advance on a rolling basis, and then negotiate as hard as we can on the marginal cost items when the time comes. Sales meetings have a very high return on investment, and they are not done, by and large, to promote the interests of employees ahead of stockholders. It helps reps do a better job, and the benefits are palpable.
I see that a great number of people who have never been in sales think their opinion on sales and motivation should count. Wrong.
I spent most of my 30 years in the branch office doing technical sales support for a large computer company. The description of the event by Wells Fargo is well supported. At the beginning of the year, as an incentive, companies announce a sales incentive for high performers. At the end of the year they announce the high performers. Ask any sales organization. They have a 100% club. That is what this is. A reward for success. It is a motivational program and they work.
In addition, there are a number of business topics presented during the meeting. These range from sales techniques to direction of the business and the company.
Those who are complaining about WFC have, as usual, zero knowledge of the program. If you don't understand it, educate yourself before you complain.
"So why doesn't Wells Fargo give me a break on my mortgage?"
I'd suggest you call them and ask -- they currently have a no-cost refinance program for customers in good standing.
They're shaving a half a point off my mortgage rate right now -- that will save me about $170 a month.
I understand the point about sales meetings being the standard way sales employees are motivated. I'm sure the benefits aren't negative, or it would not be the standard way.
But. I'm a new owner of WF, and I object to the standard way of doing business. Let's treat sales the way other parts of the organization, who work just as hard if not harder than sales, are treated. If WF doesn't want to listen to my hectoring, don't take my money.
Seems that many posters here have fallen prey to the mob-thought that somehow what WF is doing is arogant or downright theft. It's neither. Ironically, "the economy" is often brought up, as if the current conditions make the Vegas trip that much more egregious.
In fact, sending $50-million to France for an airplane is tone-deaf. Sending a 1000 top sales people - and their wallets - to a community to re-circulate millions of company and personal funds into the economy is just downright patriotic.
MORE WELLS FARGO TRIPS (except, come to my town next time)!
It appears that Victor, et al have never worked for an outfit that acknowledged a job well done.
I have, both civilian and military. It boosts morale and is comparatively cheap. (I'm in IT, by the way.)
And salespeople are the one who bring in business, shorting them on "attaboys" is pound foolish.
Here's the fundamental problem: the "bail-out" moved from an asset based approach to a capital based approach. Taxpayers are owners now, and our representatives in the House have a constitutional duty to stick their big fat noses into every single company that has our money. When Congress finds a good political fault line opening up, like buying French jets, or baseball stadium naming deals, or corporate junkets to Vegas, it jumps equally on all of them. Discrimination among "good" junkets or "bad" junkets is too much to expect.
The way to fix this is obvious. The next TARP program should be focused on assets. We, the taxpayers, should buy only the GOOD assets from Citi or BofA. Leave the executives behind to manage the "bad bank". They can pay themselves whatever they want, which will not be much. They can struggle to achieve price discovery all they want, though they won't like the news when it comes. Let 'em sink. I hope they rot.
Meanwhile, we the taxpayer will own the good stuff. We can hire somebody other than Goldman to organize those assets into about a dozen "good banks" and sell our interest in the equity markets. Et voila! We get our money back, and the markets pick up in the same instant. The only losers are the losers that ran these companies into the ground, Robert Rubin, Ken Lewis and their ilk. The stockholders already have been wiped out, so this paln doesn't hurt them any more. The taxpayers win. And, best of all, the Congress can go back to whatever it does every day without worrying about Vegas trips. Maybe they can investigate Charlie Rangel a little bit, or something.
When you sell your soul to the devil you must dance to his tune. When Government sticks it's nose in the tent, profit becomes of secondary or tertiary importance. From the comments, taxpayers are obviously unhappy with this type of spending. Politicians will feel the heat and in turn apply it to WF. If WF did not need the TARP money they should have gone to court to block the money. They didn't so they get to live with the whims of politics influencing their business decisions.
Wow! I never thought that asking Wells Fargo to pay off my mortgage would get such a response.
I do live within my means and pay my bills on time. That is why I am torqued about perks. Most of my investment money was lost when my CEO and CFO cooked the books. That caused our stock to be delisted from the New York stock exchange and my investments went from paper dollars to a paper certificate that shows I have shares of a stock that doesn't exist. The CFO ran to Canada and the CEO remains overseas where the US won't extradite him.
The point is that those of us who worked hard to take care of our families were kicked in the teeth by those who were willing to play loose and fast with our money and with the law. Now the bailouts are taking care of the rich bums and kicking the rest of us in the rear.
Yes, I do disagree with the overall bailout pushed by our nation's elected and appointed leaders. The entire bailout is not constitutional. If you take the time to remember basic civics, the government now controls the financial institutions and the means of production. That is called fascism.
The Puritans were not concerned that someone might have fun. That thought is a popular myth. Study of the Puritans showed that they did indeed have fun.
As a note, words such as moron and idiot are specific words with legal meanings and they really shouldn't be used as descriptive adjectives unless you are a medical doctor or shrink and are willing to back your comments up in court.
Please catalog these comments and circle back when time is allowed for a good case study in Western European mentality.
The punch line of capitalism: The market aligns incentives in such a way that individuals working for their own best interest leads to a thriving and ever-improving standard of living for most members of society.
Aligning incentives - does that phrase mean nothing to some of you? It is not my (or your) place to retroactively decide what incentives are productive for each company. WF obviously has some empirical data and cost analysis that says a little Vegas action for their top X% of salespeople will attract, retain and reward top revenue generators.
The markets reward scarcity. If you've ever been in sales you will understand that finding quality sales people is extremely difficult. Keeping them may be even harder. New business (sales) is the lifeblood of any company so try and find some correlation between the two variables.
Goodnes. Wells Fargo could've chosen to turn down the money that was being offered with little oversight...while their competitors snapped it up and spanked their ass with it (haven't noticed what GM did as soon as it got its money...and offered high risk loans at no interest that Ford couldn't....because it didn't get a pile of "free money"?)
1. Wells Fargo is rewarding high performers.
2. Not one of you mullets "own" Wells Fargo, nor is it "yours" simply because the Federal Government owns SOME of its stock. These are the most egregious of the statements I've seen here that represent small minds...not deep thinking.
3. What I see here smacks of peevish jealousy. It's pathetic.
Many people posting anger about WF and their home mortgage with same. To you: If you have a problem with your WF home mortgage - whatever that problem may be - then I have a problem with WF granting you a mortgage in the first place.
Sparky, you applied for the loan; you determined whether or not the terms were acceptable to you; you decided to make the leap and accept the terms. If now you find that your judgement with respect to the above didn't work out as you planned, that has nothing to do with Wells Fargo.
More importantly, if after accepting your money, WF elects to spend it in whatever fashion it pleases, well, good. It's now their money, and they are giving it back to the community in the form of fair, normal commerce.
Moreover, WF was not "bailed out" by anyone. The Feds forced the bank to sell premium shares for $25b. That's it. WF didn't want the deal, but was extorted to take it. Nonetheless, $25b is a very long shot from any range of controlling interest; certainly not enough to be now calling the shots.
Ok, there are a lot of opinions out there but those opinions are feeding off of misinformation. Wells Fargo did not need any money for any bailout. They are strong company that does recognize their employees and I believe the only reason the whole thing was cancelled was because of the bad press.
There are so many stupid people out there that believe everything the media spreads. We all know the media does not get it right all the time. Why should had working employees not get recognized? And as for the customers calling in griping at the little people at Wells Fargo….try something more productive like managing your finances better.
Not one of you mullets "own" Wells Fargo, nor is it "yours" simply because the Federal Government owns SOME of its stock.
Ah, grasshopper, you are mistaken. I am indeed one of many owners, because WF has taken my government's money and my government owns shares. If WF didn't like that investment, it should not have taken it. In a sad irony, this is analogous to those poor souls who claimed they were misled when signing the mortgage papers -- "I didn't know they could do *that*!" Tough for the mortgage holder, tough for WF management if they didn't know what they were signing.
Why should had working employees not get recognized?
No problemo with employee recognition. Sundaes in the break room and a nice certificate for the wall, combined with continued employment and appropriate salary are what most people get. Why isn't that good enough for sales?
Glad I don't work for Fred. Sounds like my grandpa when I was a kid. You're taking a bus to school?? Why when I was your age I walked 10 miles in 3 feet of snow.....uphill...both ways !!!
I'm not in sales either but I have friends who are and I'll admit I've felt those pangs of jealousy when I hear of some of the perks they get. I know one who got a $10k Visa gift card. Another one a 50" flat screen. Yeah, beats the heck out of the sundaes Fred and I got in the break room. And many of them make some decent coin. I still don't want to be in sales though so I remind myself of that when I feel envious. I don't think I'd like it and I don't think I'd be very good at it.
Lots of hostility here and I agree with the earlier mob mentality comment. Everyone has a hair trigger right now on this stuff and it's a shoot first and ask questions later when it comes to finger pointing and admonishing the big bad corporate greedmeisters. Probably doesn't help that banks are probably second only to airlines in pissing people off.
I think it's clear that Wells is no AIG or GM. They're performing pretty well all things considered. I also agree the TARP program may or may not help the economy but it certainly helped those that needed it while dragging those that didn't into the muck.
Lastly, I feel sorry for those in the travel/tourism and incentive/reward travel industry. I have friends in both and they are laying off right and left. Nobody's going to be willing to risk a public outcry and losing customers because the AP may write a ridiculous article about their upcoming 'junket' that probably would ave made some hard working employee's year. Tough luck for you buddy - public opinion wins again.
The subprime mortage business made big money for Wells Fargo, those subprime mortgages were repackaged and sold as the toxic debt that has derailed this market. Wells can BS everyone that they are rewarding good mortgage brokers, but how many of those mortgage brokers knowingly pushed subprime mortages on people who would normally never qualify for a loan. In the Mortgage business, its all about closing the deal and sealing the commission, damm the consequences after the fact. Mortgage brokers are now viewed as equals to the dirt lot used car salesman, who are ony concerned about making the fast buck
>>But it sounds like this is >>actually a reward for >>salespeople. If you’re hurting >>for cash, you probably want to >>reward salespeople who do a good >>job. Or am I missing something >>here?
You need to do that whether or not you are hurting for cash
Agreed. Top producing sales professionals do need to be rewarded. The question is HOW? If a company has lost $25 billion in its last quarter and it has accepted bailout money, a luxury junket is highly inappropriate.
Take the top producers and their spouses out for dinner at a nice LOCAL restaurant. Save the out of town incentive trip for next year when the company is performing well.
Wells Fargo displayed very poor judgement and now they are paying for it in the court of public opinion.
Wells Fargo, well YOU CORPORATE MORONS. You took billions from the tax payer (ME). Too bad about your Vegas get away. I've never been able to afford Vegas. So long as you corporate Idiots take MY MONEY! You had better act austere with it. Very enraged tax payer!
WF should have been better off by giving $1000 visa gift card than arranging a Junket in LV. Don't you know how to learn from other's mistakes? (Citi's Jets & Auto execs flying in corp Jets). These days perception is everything..
I read your recent article entitled: "Commentary: 'Chutzpah' award for Wells Fargo."
I would like to correct a few of your factually inaccurate comments as they reflect the broad brush that many in the media have used to paint Wells Fargo with along with many of the other banks that have required government TARP funds.
As alluded to in another CNN article today (http://money.cnn.com/2009/02/11/news/companies/congress_banks/index.htm?postversion=2009021110?cnn=yes), Wells Fargo did not need, ask for, or want any government bailout funds. The bank was not in a bankruptcy situation asking the government for bailout money like some other banks. The bank has remained fiscally conservative and financially sound and solvent.
Rather, the CEO was called to Washington, D.C. and instructed by Treasury Secretary, Henry Paulson, that the bank was going to accept the funds. Wells Fargo asked for a way to repay the funds early, but current TARP provisions legally impede the bank from doing so. Unfortunately, most media outlets only seem to report the fact that "Wells Fargo took bailout money" only followed by a report on what Wells Fargo is doing operationally.
I suspect that most reputable journalists, reporters, and columnists perform some adequate level of due diligence prior to reporting (although the number is this group appears to be dwindling). If you believe yourself to be in this group, can you prove that Wells Fargo was in dire financial straights such that it had to go to the government to request TARP funds? (To save you some time, the answer will be no because it's not true. And if you know anything about how a business runs and grows, you wouldn't cite any anticipated layoffs from the recent acquisition of Wachovia Bank as your justification for financial condition.)
Likewise, how did you determine that the Wells Fargo employee recognition event in Las Vegas (which would have been an incentive to the bank's mortgage lenders--the same people who have been successful at ensuring that all members of the community--including low-income households--received mortgage loans) was going to be paid for using TARP funds rather than Wells Fargo revenues, since this is what you're implying in your article? (To save you some time, you can't demonstrate this because it's not true.)
Since the bank was required to take TARP funds, there has to be some accounting for the funds. The bank said from the start that it would use the government’s investment to help make more loans to creditworthy customers. It said it would use the funds to find solutions for mortgage customers who are late on their payments or facing foreclosure – so they can stay in their homes. It also said it would report on it's progress. And the bank has done just that.
Unfortunately, media outlets such as your continue to demonstrate incompetence, bias, and bull. Maybe your column could adopt that expression.