The Economy

Been a bit busy and not posting. ... but not surprisingly not seeing a reference to this on here.

https://www.cnbc.com/2023/02/25/warren-buffett-annual-letter-berkshire-hathaway-stock-buybacks.html

Warren Buffett’s Slap at Buyback Illiterates Rings True

 

Wells Fargo doesn't get much benefit of any doubt, given that they were caught committing outright fraud -- provably.

That doesn't mean, though, that if you are going to claim racial discrimination, you don't need actual proof of racial discrimination. When those "rejecting nearly half of black applicants for refinancing" stories came out, Wells Fargo didn't dispute the numbers, but they claimed it was for financial reasons, and had nothing to do with race. Which again, could be BS. ... maybe they are actually a company that is turning away revenue (although, then, it doesn't quite fit with the fraud they committed, because they were cross-selling to fraudulently reap revenue from unwitting customers; it seems to have been a company that would do anything for a buck, dishonestly if they thought they could get away with it).

If Julianne Malveaux has proof that that is complete BS. ... I haven't seen it. She needs to show that the financials were the same across race, but nonetheless black borrowers looking to refinance were being rejected over and over again while whites weren't.

That may be the case, but it's the one thing I haven't seen. And I am a little suspicious because it is Julianne Malveaux, who among other things is an advocate for white people being forced to pay black people reperations.

 

One other thing about Wells Fargo. We tend to talk about these large companies as if they are monolithic things, not a collection of hundreds of thousands of employees (in this case). I'm not saying that to excuse the culture, or the C suite that should have been on top of what was happening within the company.

But the cross-selling fraud being committed on large scale wasn't exactly a company policy. Nobody was telling individual branches to do something illegal. The company policy was to pressure supervisors to get their sales reps to get customers to open new accounts. And they were being incentivized financially to do it.

The combination of that pressure and the employees wanting the bonuses led to a lot of low-level sales associates crossing the line. And nobody was minding the shop to catch it and make sure it wasn't happening.

You'd think (at least I would) that a company with that kind of money-hungry cultuer wouldn't have have a parallel culture of turning away revenue based on the color of their customers' skin. Mortgage originations and refinancing earn the bank a lot of money, and the sales associates are simililary incentivized financially to generate that business. The only way I could see racial discrimination happening would be if they were turning away black people before they could even apply for new loans due to some racial bias that even doing the work would be a waste of time because they assume they are not going to qualify (because of the color of their skin). But even that wasn't what was happening, because these were actual applications that were being rejected.