This is the October 15, 2011 cover of the Economist:
In that issue, The Economist wrote:
Investing during a crisis
Nowhere to hide
Investors have had a dreadful time in the recent past. The immediate future looks pretty rotten, too
PITY the world’s savers. Economists and other busybodies chide them for not spending more, thereby stimulating the economy. Meanwhile their pension schemes are steadily being made less generous, a process that will require them to save more, not less, if they want to enjoy a comfortable retirement. Britons now retiring on private pensions will receive an income 30% less than those who left work three years ago (see Buttonwood). When savers try to find a home for their money, they face daily headlines about bank bailouts, sovereign-debt crises and the possibility of another recession.
Given the scale of the risks, investors are not being offered much in the way of reward. In much of the developed world, yields on cash are 1.5% or below. The most liquid government bond markets (those of America, Britain, Germany and Japan) offer yields of 2.5% or less. In both cases, such meagre returns are part of a deliberate policy: governments and central banks want companies that might create jobs to start borrowing again. Even American equities, despite a dismal record over the past decade, offer a dividend yield of just 2.1%, a level that historically has been associated with low returns for several years to come (see article). That is a legacy of the stratospheric valuations attained by Wall Street at the height of the dotcom bubble.
The danger for savers is not simply of disappointing returns, but of devastating blows to their wealth. …
Had the investors ignored the Economist’s doom and gloom warnings and simply stuck their money in a S&P 500 index fund, they’d have done just fine:
This is the S&P500 in the five years since the Economist’s Nowhere to Hide.
There’s a lesson here somewhere… It’s probably Have Faith.
Warren Buffet would agree. Look what happened to Berkshire Hathaway in those five years.
Berkshire Hathaway stock more than doubled.
The cockroach stock that is Wells Fargo.
After yesterday’s column on Wells Fargo (click here) a reader emailed me:
Most employees of Wells don’t bank with them, enough said.
I did Google “Wells Fargo took my house” and found many horror stories, including this one:
Remember when Jim Cramer interviewed CEO Stumpf (back in September 2015 before all this blew up)? One person posted::
If you’ve done business with Wells Fargo in the past 10 years or so – especially if you’ve had a mortgage or other loan “serviced” by WF – you know what a huge line of BS John Stumpf is feeding CNBC’s infotainment “investment analyst” Jim Cramer in this clip.
The former Wall Street hedge fund manager has to be particularly blind and deaf if he believes that Wells Fargo hasn’t taken part in the same list of ethically-reprehensible activities designed to defraud customers and make money for the bank: robosigning,forging foreclosure documents, predatory mortgage lending in minority communities, manipulating debit card transaction to generate overdrafts, and forcing mortgage borrowers into price-gouging home insurance.
The company even gets complaints for its handling of student loans and paid to settle a lawsuit regarding its debt-collection processes by harassing consumers, who are generally protected by specific debt-collection law. How Cramer can appear to be such a cheerleader for Stumpf & Co. in light of all this is beyond me, but he certainly seems to take everything the CEO says as absolute truth.
For that piece, click here.
I found a web site called ConsumerAffairs.com. It has the stories of the Top 1,073 Complaints and Reviews about Wells Fargo Mortgage. Fascinating reading.
As I kept Googling, I found this comment from Sept. 13, 2016.on
This is the worst bank. They charge you for everything. They don’t deserve a star. I will just close my account with them. I regret opening this account and I will not advise anyone to use this bank. Don’t even try banking with them. I just pray Wells Fargo closes down because of their fraudulent activities.
It will charge five things simultaneously — two iPhones, two iPads, and an Apple watch.
Only $23.99 at (where else?) Amazon — click here.
More stuff to read on Donald and Hillary
+ Donald Trump Doesn’t Believe in the Constitution
Beyond the Second Amendment, Trump shows outright disdain for the nation’s fundamental organizing document
+ Hillary Clinton’s email misdemeanor might actually hand Donald Trump the presidency
+ Party Loyalty Can’t Make Me Vote for Clinton
A lifelong Democrat, I’m backing Trump because he can shake up our politics and revive the economy.
Why we miss Rodney Dangerfield — Part 2
+ My wife likes to talk to me during sex; last night she called me from a hotel.
+ It’s been a rough day. I got up this morning and put a shirt on and a button fell off. I picked up my briefcase, and the handle came off. I’m afraid to go to the bathroom.
+ I was such an ugly baby that my mother never breast fed me. She told me that she only liked me as a friend.
+ I was so ugly my father carried around a picture of the kid that came with his wallet.
+ One year they wanted to make me a poster boy — for birth control.
+ When I was born, the doctor came into the waiting room and said to my father, “I’m sorry. We did everything we could, but he pulled through anyway.”
+ I’m so ugly my mother had morning sickness AFTER I was born.
+ Once when I was lost, I saw a policeman, and asked him to help me find my parents. I said to him, “Do you think we’ll ever find them?
“He said, “I don’t know kid. There’s so many places they can hide.”
+ I went to see my doctor. “Doctor, every morning when I get up and I look in the mirror I feel like throwing up. What’s wrong with me?
“He said: “Nothing, your eyesight is perfect.”
Harry Newton, who wishes everyone a great weekend. It’s been a great week.
P.S. I started my career as an investigative financial journalist for the Australian Financial Review. My writings there helped put six crooks behind bars. My gut says it’s time to put CEO Stumpf and Carrie Tolstedt, head of Wells Fargo Community Banking, behind bars for this latest scandal. At the very least, they should give back their bonuses. She collected $125 million. He got just under $200 million from Wells Fargo in bonuses and salary. It’s an amazing story. There will be more cockroaches from Wells Fargo in coming weeks. Trust me on this one.