Wells Fargo scandal spreads to Prudential insurance
It may not have been just fake bank and credit card accounts. Now there are allegations that Wells Fargo customers were sold Prudential insurance products they didn't want.
Wells Fargo employees appear to have signed up customers for a low-cost Prudential life insurance policy without their knowledge or permission, according to three former Prudential employees who filed a lawsuit last week against the insurance giant. The allegations bear striking similarities to the scandal that has rocked Wells Fargo (WFC) for three months.
The lawsuit notes that some Prudential insurance products owned by Wells Fargo customers listed obviously-fake home addresses on their applications like "Wells Fargo Drive" or phony email addresses such as "email@example.com." More alarming, the insurance premium payments may have come from dormant Wells Fargo accounts.
The three former Prudential (PRU) employees filed a Dodd-Frank whistleblower complaint with the SEC on Saturday alleging they were retaliated against after uncovering the misconduct. The employees were members of Prudential's investigations division and had been tasked with reviewing the insurer's relationship with Wells Fargo following the fake account scandal that emerged in September. The employees say their review into the insurer's Wells Fargo relationship turned up a number of red flags. They found a 70% lapse rate for MyTerm policies sold in 2014 (the first year they were sold in Wells Fargo); a spike in sales near the end of each quarter; policies were sold "predominately to individuals with Hispanic sounding last names."
Portland To Heavily Tax Companies If Their CEO Earns Too Much Money
Despite the popular revolt which seemed to characterize the 2016 elections, it seems to me as if some of you still just don’t get it. And by “you” in this case, I mean the city council in Portland, Oregon. You see, guys, the idea is to encourage companies to grow and hire more people. It’s not to drive them away. And yet we see new laws being passed such as this.
The city of Portland, Oregon, is imposing a surtax on companies whose CEOs earn more than 100 times the median pay of their lower-wage workers. Companies will see a 10 percent increase on their tax rate if the CEO makes 100 times the average employee and a 25 percent increase if they make 250 times the average salary, The New York Times reported.
The new law, which passed 3-1 in the city council, is estimated to generate about $2.5 to $3.5 million per year, which will be used to address income inequality on a local level. On “Your World” today, Portland City Commissioner Steve Novick said that aside from climate change, extreme economic inequality is the greatest problem of our time.
So if the company’s CEO earns “too much money” in the opinion of the city council, they will tax not the executive, but the entire company, making it less profitable. And given the margins that most operations work under, if you slice 25% off the top they’re going to be in the red pretty quickly.
Venezuelans Rush to Stash Cash Before Biggest Bill Is Nullified
Venezuelans were wearily rushing to deposit bank notes or dump their cash savings entirely on Monday following an announcement by President Nicolas Maduro that he was invalidating the country’s biggest bill because of what he says is an attack on the nation’s liquidity.
The socialist leader shocked the country on Sunday when he said the 100-bolivar note would be removed from circulation within 72 hours. For months, the South American nation has suffered a hard-cash shortage as inflation spirals toward 500 percent, which Maduro insists is the product of an “economic war” and an attempt by his political foes to smuggle currency out of Venezuela.
Higher-denominated bills are scheduled to be released later this week, but Venezuelans, already reeling from a deep recession marked by triple-digit inflation and rampant shortages of consumer basics, seemed to let out a collective groan as they added an unscheduled trip to the bank to their list of woes.
“This is madness,” Leopoldo Lopez, a 54-year-old insurance salesman, said as he waited in line to deposit a thick wad of banknotes at an automated bank machine in eastern Caracas. Lopez griped that, just days before, he had endured a long wait to get cash, only to be forced to line up yet again to deposit it. “At this point I have no idea where we’re headed,” he said. According to a report by Torino Capital, a New York investment bank, the 100-bolivar notes account for more than three quarters of Venezuela’s cash outstanding and 11 percent of the nation’s money supply, making Maduro’s decree a difficult task for a nation in the throes of an economic crisis.
With Fed Expected to Hike, Attention Turns to What It Says
There isn't much doubt about what the Federal Reserve will do when its latest policy meeting ends Wednesday: It's all but certain to raise its benchmark interest rate — its first increase in a year. The real anticipation surrounds what Fed officials may or may not say about the pace of future rate hikes against the backdrop of Donald Trump's election.
Will they signal that they expect to raise rates very gradually in the coming year? Or will they say the risk of high inflation resulting from Trump's tax and spending plans may require accelerated rate hikes?
On this, economists and investors agree: The Fed will raise its key rate by a modest quarter-point to a range of 0.5 percent to 0.75 percent — a move that will likely lead to slightly higher rates on some consumer and business loans. The Fed last increased rates last December, when it raised its benchmark rate from a record low set at the depths of the 2008 financial crisis.
"Never has the Fed telegraphed a rate hike as thoroughly as this one," said David Jones, chief economist at DMJ Advisors. Yet how the Fed will devise its rate policies in light of Trump's policies isn't clear and might not be clear even after it issues a statement and Chair Janet Yellen holds a news conference Wednesday.
Repealing Obamacare is A Giant Middle Class Tax Cut
Congressional Republicans have vowed that one of their first acts next year will be to send legislation repealing Obamacare to the desk of President-elect Donald Trump. Doing so will not only repeal a failed law that has resulted in skyrocketing premiums, cancelled healthcare plans, and billions in new, wasteful spending, it will also provide a giant tax cut to middle class Americans.
Obamacare imposed roughly one trillion in higher taxes over ten years, including at least seven that directly hit middle class families. Repealing these taxes will provide much needed relief to the paychecks of families across the country.
Repealing Obamacare will also undo Barack Obama’s broken promise not to sign “any form of tax increase” on any American making less than $250,000. Individual Mandate Non-Compliance Tax ($43.3 billion tax hike between 2016-2025)
Anyone not buying “qualifying” health insurance – as defined by President Obama’s Department of Health and Human Services -- must pay an income surtax to the IRS. In 2014, close to 7.5 million households paid this tax. Most make less than $250,000. The Obama administration uses the Orwellian phrase “shared responsibility payment” to describe this tax.
Manufacturing's Greatest Days Lie Ahead
In Donald J. Trump's "Contract with the American Voter," the president-elect outlines what he intends to do to in his first 100 days in office to "Make America Great Again." A key component of the contract is the seven actions that he will initiate during his first days as president "to protect the American worker." Two of these actions will importantly have long-term consequences for the economic success of American manufacturers: First up, President Trump plans on lifting restrictions on the production of domestic energy resources, including shale oil, natural gas and clean coal. Second, he has pledged to lift regulatory roadblocks established by the Obama administration to allow important energy infrastructure projects, such as the Keystone Pipeline, to progress to completion.
Team Trump's promotion of domestic energy will yield significant economic dividends in several ways. First, it will stimulate economic activity in the U.S. and will help revive job creation in the energy sector, both for workers employed directly in oil and gas drilling and extraction activities as well as increased employment in all of the support activities for oil and gas operations.
Further, removing restrictions on domestic energy development and the pipeline infrastructure that supports the efficient transportation of oil and gas will contribute to a continuation of the low energy prices that have made the U.S. one of the lowest-cost manufacturing locations in the world for energy-intensive production. American manufacturers that use natural gas to produce chemicals, petrochemicals, fertilizer, plastics, pharmaceuticals and fabrics have benefited in recent years from the lowest natural gas prices in the world. At prices that are currently 50 percent below prices in Asia, Europe and South America, the low cost of natural gas here goes a long way towards offsetting higher U.S. labor costs and helps make our energy-intensive manufactured goods competitive globally with countries like China, which have lower labor costs.
Trump's economic policy advisers have also proposed tax policy reforms that have the potential to positively impact American manufacturers in the coming years that include a reduction in the top U.S. corporate income tax rate from 35 percent to 15 percent. That reduction in the U.S. corporate income tax rate from the highest among the OECD countries to a rate that is below the average rates for both Asian and European countries would for the first time in many decades give U.S. companies, including manufacturers, an international tax advantage over their foreign competitors.
Blockchain is busting out of its britches
It seems like an eon ago, but it was actually just last March that I added my momentum, via an article in Techonomy, to the growing body of opinion that behind Bitcoin, the cryptocurrency, was a larger, less-well-understood narrative, the story of blockchain, the technology framework Bitcoin was running on. Since then, this viewpoint has been adopted by the mainstream, and hundreds of blockchain applications are in pilot.
Over the past few months, the flood of blockchain announcements has been almost overwhelming, as many companies and industries rush to realize the value of blockchain technology. There’s no real shortcut to understanding blockchain, but the simplest explanation is that it’s a “public” ledger (to those with access, which could be a limited group or anyone), shared and distributed, a single account of things. People can write in it, but they can’t erase anything, and everyone can satisfy themselves that they’re seeing the same version as other authorized parties.
The most useful metaphor I’ve found is this: picture a family of elephants walking through the forest, each holding the tail of the one in front with his or her trunk. The elephants are the blocks and the links between trunk and tail are the chain. The blocks are encrypted records of transactions, and each block has its own integrity. It also passes a record of its integrity to the next block in the chain, and each block has a representation of the integrity of all the prior blocks in the chain and passes these forward to the next block as it’s being built.
Inside each block is one or more encrypted transactions in the order in which they arrived on the network. The transactions could be any text and, technically, not transactions at all. They could be happy-birthday wishes. But for practical reasons, most of them are things like “this person sold that thing for this price to this other person at this time” or “at this time, that person signed for the delivery of this equipment.” Each transaction contains information agreed to by at least two parties, and, once decrypted, each party involved has access to whatever information they are authorized to see.
Gold Firms Up Ahead of Fed, After Hitting 10-Month Low
Venezuela's Response To Inflation - Just Confiscate All The Money
The level of skill on display in the Bolivarian socialists' management of the Venezuelan economy is, as has been remarked around here before, quite something to behold. Not, needless to say, a sharp intake of breath at the wondrous skill with which they manage it. Rather, somewhere between tears and laughter as they continue to make near every economic mistake known to man. This is, recall, the tropical country, ideal for sugar growing, which ran out of Coca Cola from an absence of sugar. The middle income oil exporter that ran out of Big Macs from an absence of a baker who could make the middle layer of the roll. The place whose currency has slumped 50% over the past month, where inflation is expected to be over 2,000% this year. The oil producer which imports crude from the USA.
A place where the government has no money and yet, until recently, they quite literally gave gasoline away to everyone (no, really, the state distribution company did not bother to charge gas stations for deliveries).
In order to deal with their chaos they've decided to try to confiscate most of the money from most of the people. This will not work out well: Venezuela is pulling its largest current bank note out of circulation amid raging inflation.
"President Nicolas Maduro announced Sunday that the 100-bolivar bill will be removed by Wednesday. The 100-bolivar note is worth about 2 cents and is the most widely used bill in the economically ravaged South American country."
Economy was ready to pick up before Trump, top forecaster says
The U.S. economy will gain a little steam in 2017, and it’s not because Donald Trump is going to unleash massive fiscal stimulus, said Drew Matus, an economist at UBS who leads the team that captured the Forecaster of Month contest in November.
“We don’t have enough information” on Trump’s plans to figure out what the possible impact on the economy would be, Matus said in a phone interview. “We haven’t done the analysis. We don’t know what they’ll look like.” “We don’t know.”
Matus and the other U.S. economists at UBS — Sam Coffin, Dave Liang, and Maciej Bolisega — have a more prosaic basis for their 2017 optimism: The bad news is going away, Coffin said, referring to the oil shock and the big move in the dollar in 2014 and early 2015.
In one sense, they say, the U.S. already had its recession — earlier this year and in 2015. “It was a recession everywhere except the consumer,” Matus said. It was only the strong growth in household incomes that kept the economy afloat.
$422 Billion: Government Collects Record Taxes in First Two Months of Fiscal 2017
The federal government collected a record amount of taxes in the first two months of fiscal year 2017, totaling $422 billion in revenue, according to the latest monthly Treasury Department statement. The federal government ran a deficit of $181 billion despite the record revenue.
Treasury receipts include tax revenue from individual income taxes, corporate income taxes, social insurance and retirement taxes, unemployment insurance taxes, excise taxes, estate and gift taxes, customs duties, and other miscellaneous items.
The amount of taxes collected by the federal government in the first two months of fiscal year 2017 outpaced all previous fiscal years, even after adjusting for inflation. The 2017 fiscal year begins on Oct. 1, 2016, and runs through Sept. 30, 2017. The federal government collected $421,567,000,000 in October and November in fiscal year 2017. Most of the $422 billion came from individual income taxes, which comprised more than half of that total at $213 billion.
The Treasury Department has been tracking this data on its website since 1998. In the first two months of that fiscal year, the federal government collected $324 billion after adjusting for inflation. This means that since 1998, tax revenues have increased roughly 30 percent.
Election 'Hack' - Do We Believe Snowden And Assange...Or McCain And Graham?
Trump's Wisconsin Victory Confirmed - Gained Net 162 Votes In Statewide Recount
It's official... again! Donald Trump remains the winner of Wisconsin following the statewide recount demanded by Jill Stein and paid for by sad snowflakes. After counting over 3 million ballots (at a cost of $3.5 million), Trump gained a net 162 votes...
Republican Donald Trump's victory in Wisconsin has been reaffirmed following a presidential recount that showed him defeating Democrat Hillary Clinton by more than 22,000 votes. Trump picked up a net 162 votes as a result of the recount that the Wisconsin Elections Commission certified Monday. Green Party candidate Jill Stein requested and paid for the recount that began Dec. 1.
But after recounting nearly 3 million ballots, little changed. The final results changed by fewer than 1,800 votes. Stein has also tried to get statewide recounts in Michigan and Pennsylvania, but courts have stopped them. The federal deadline to certify the vote is Tuesday. Wisconsin's recount uncovered no widespread problems or hacking as Stein had suggested, without evidence, that there might be.
"Completing this recount was a challenge, but the real winners are the voters." "Based on the recount, they can have confidence that Wisconsin's election results accurately reflect the will of the people, regardless of whether they are counted by hand or by machine."
Greece faces permanent crisis as IMF warns bail-out plan 'simply not credible'
The International Monetary Fund has hit back at claims that it is demanding more austerity in Greece, as the Fund warned that the country's ambitious budget targets were "simply not credible".
Firing a broadside at Brussels and Athens, Maurice Obstfeld, the IMF's chief economist, and Poul Thomsen, director of the IMF's European department, said cuts to investment and discretionary spending had "gone too far" and would prevent the Greek economy from recovering.
Just 48 hours after Euclid Tsakalotos, Greece's finance minister, accused the IMF of "betraying" the country by pushing for more belt tightening, the senior IMF officials insisted that they were "not demanding more austerity".
"We have not changed our view that Greece does not need more austerity at this time. Claiming that it is the IMF who is calling for this turns the truth upside down," they wrote in a blog post. They warned that demands by Greece's creditors for a sustained 3.5pc primary surplus - which excludes debt servicing costs - were unrealistic and unnecessary.
Would You Use a Robot Lawyer to Get Out of a Parking Ticket?
Like many people, Joshua Browder is fond of saying that the legal system only works for the rich, and parking tickets hurt the poor. But unlike many others, he’s doing something about it. He’s providing free legal “advice” through a chat bot named DoNotPay – and says he’s helped drivers in the United States and United Kingdom beat 200,000 parking tickets, and counting.
Soon, tenants in half a dozen cities across the United States will be able to use his tool to fight with landlords, too. Browder, a 19-year-old Stanford computer science student, has written software that he calls the world’s first robot lawyer. After a quick registration, anyone can try it out on his website, DoNotPay.co.uk.
Not surprisingly, Browder became a bit of an instant cult hero a year ago when DoNotPay was launched in his native United Kingdom, where London parking tickets are an urban nightmare. He’s slowly adding support for U.S. cities – and got another round of attention recently when he was featured on stage with IBM CEO Ginni Rometty at the firm’s Watson Developer Conference.
While DoNotPay began as a ticket-fighting tool, Browder has already expanded it to other consumer-critical issues, like landlord-tenant disputes and airline compensation. Now he’s working to include even more ambitious kinds of assistance, such as automated legal help for Syrian refugees. “Automated legal services are bigger than just a few parking tickets,” Browder said during his Watson presentation. “Over 80% of people who need a lawyer can’t afford one.”
The Fed explained
Oil Surges as More Producers Join Output Cuts
Oil prices surged Monday after more oil-producing nations agreed to slash production, a move aimed at pushing the oversupplied oil market into balance, or even a deficit, to prop up a crude market that had been stuck in a two-year slump.
U.S. crude futures rose $1.33, or 2.58%, to $52.83 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, gained $1.36, or 2.5%, to $55.69 a barrel on London’s ICE Futures Exchange.
Over the weekend, a group of big oil producers outside of the Organization of the Petroleum Exporting Countries, including Russia, agreed to scale back their output by 558,000 barrels a day. That is on top of the cut of 1.2 million barrels a day agreed to by OPEC in late November. The total reduction represents almost 2% of the global supply.
The deal is viewed as a feather in the cap for Saudi Arabia, the oil cartel’s de facto leader and the world’s top exporter of crude. The market got an extra boost of confidence on reports that Saudi Arabia indicated that, if necessary, the kingdom may be willing to take a deeper cut than the 486,000-barrel cut it had agreed in the November meeting.
Big gold theft from armored truck in France
French police say they are hunting for four men suspected of stealing gold dust worth an estimated 1.5 million euros from an armored truck Monday before setting cars ablaze near a major highway and fleeing. The suspects, operating in multiple cars, surrounded the armored truck and forced it off the A6 highway between Paris and Lyon, a national gendarme service spokesman and a judicial official said.
They then seized the gold, locked the two delivery men in the back of the truck, and set one of their own cars on fire before fleeing, according to the spokesman. He said the flames spread to three cars nearby and were threatening to engulf the armored truck as well, but local police intervened thanks to a tipoff from a witness and rescued the two men in time. The other cars were unoccupied, the judicial official said.
Police vehicles and a helicopter searched the surrounding fields and forests Monday near the southeastern town of Dardilly, the spokesman said. The spokesman and judicial official spoke on condition of anonymity to be able to give details about an ongoing investigation.
Scientific police studied the charred hulls of the cars and the empty truck, operated by security company Loomis.
Credit Card Debt Could Cause Next Financial Meltdown
Black Friday should be a day when nobody buys anything! People should take advantage of November 25 to reflect on the impacts of our mode of consumption. Considering the average American’s credit card debt—and consumer debt in general—one almost wishes such a rule were mandatory. Debt is threatening a financial meltdown.
No amount of stimulus from President-elect Donald Trump’s tax cuts will help resolve the spiraling problem of consumer debt. A recent survey suggests that, on average, Americans own 2.6 credit cards each. That becomes 3.7 when limiting it to just the stats of those who actually own credit cards. Could a financial meltdown be around the corner?
The problem goes beyond credit cards. A growing number of digital pay options compel consumers to use credit cards. They also encourage more spending, 24 hours a day, 365 days a year. The result is that the average American household debt in 2015 was $90,000.
Why is credit card debt a risk to the overall economy rather than simply the debtor? Because credit cards are a barometer for the financial state of households. Given the effects of the subprime mortgage crisis, consumer debt alerts the market about the build-up of bubbles that could blow up, taking down the entire financial system.