[:de]Wells Fargo is going backward with thousands of job cuts as JP Morgan and other banks boom[:ru]Wall Street’s crypto guru says pot stocks feel like bitcoin last year — so he’s shorting them[:en]Wells Fargo is going backward with thousands of job cuts as JP Morgan and other banks boom[:fr]Wells Fargo is going backward with thousands of job cuts as JP Morgan and other banks boom[:]

[:de]

  • Until now, the biggest U.S. bank by employees had resisted deep job cuts, keeping headcount at about 265,000.
  • In the second quarter, Wells Fargo was the only major U.S. bank to report lower year-over-year revenue, and it had the worst efficiency ratio, a widely watched industry metric.
  • Wells Fargo is the only bank that hasn’t significantly improved earnings after the administration’s tax cut, according to one analyst.

Wells Fargo Chief Executive Officer Tim Sloan is cutting jobs with the hope that he can save his own.

Ever since taking over as CEO almost two years ago, Sloan has given top priority to move the bank past the fake-accounts scandal that garnered national headlines in 2016.

Under Sloan, the bank has overhauled managers and its board, launched apologetic ad campaigns and revamped sales practices. But the U.S. bank with the most employees has, until now, resisted deep job cuts, keeping its headcount at about 265,000.

That changed Thursday, when Sloan informed employees that up to 10 percent of positions — as many as 26,500 — would be eliminated over the next three years. In a town hall message broadcast to workers across the country, Sloan explained that Americans’ adoption of digital banking and the firm’s efficiency programs would result in layoffs and attrition.

«The message was, we’re trying to meet customer needs better by cutting staff by 10 percent, which is laughable,» said Charles Peabody, an analyst at Portales Partners. «They’re cutting expenses because they’ve got a revenue problem, not to meet their customers’ needs better.»

Wells Fargo, the nation’s third largest bank by assets, is struggling under the costs and business impact of its ongoing sales practice scandals. In September 2016, the bank said it was firing more than 5,000 employees it blamed for creating fake accounts under a high-pressure sales culture. But after disclosing that the bank opened millions of unauthorized bank and credit card accounts, other abuses were revealed, from bogus charges on pet insurance to the improper handling of wealth management and commercial clients.

This should be boom times

Thanks to «widespread consumer abuses,» the Federal Reserve has limited Wells Fargo from growing in assets, which has stymied loan growth. As a result, Wells Fargo is the only bank that hasn’t significantly improved earnings after the administration’s tax cut, according to Peabody.

This comes despite a U.S. economy that is growing at the fastest pace in a decade. Stocks are at record highs, unemployment is at record lows and interest rates are rising. These are ideal conditions for banks, which take in deposits and make loans, pocketing the difference in interest rates on the products.

J.P. Morgan Chase, the biggest U.S. bank, has said it was opening branches in markets where it didn’t already have a presence. When asked about the threat that technology poses to bank jobs, CEO Jamie Dimon has said he expected the headcount to remain steady because new positions are being created.

In the second quarter, Wells Fargo was the only major U.S. bank to report lower year-over-year revenue, and it had the worst efficiency ratio at 66.7 percent. The metric, followed by analysts and investors, measures how much expenses consume revenue, and the lower, the better. Competitors including J.P. Morgan were almost 10 percentage points better than Wells Fargo.

Peabody figures that by the time the legal and regulatory scrutiny lifts and the bank is allowed to start growing again, the U.S. could be facing a recession. This leads him to one conclusion: Sloan’s job is in jeopardy.

«I think they’re going to have a tough time growing earnings,» Peabody said, «and Sloan is going to have a tough time surviving the next few years.»

The bank denied recent rumors this week that former Goldman Sachs executive and top Trump economic aide Gary Cohn was potentially replacing Sloan. Betsy Duke, chair of Wells Fargo’s board of directors, said in statement that the CEO «has the unanimous support of the board, and this support has never wavered.»

After the cuts were announced, the bank was likely hoping for a boost to its stock. By the end of Thursday’s trading, the shares had climbed just 0.6 percent. Meanwhile, as higher interest rates boosted the whole sector, J.P. Morgan shares ended the day up 0.9 percent.

[:ru]

  • «The prices of cannabis stocks today feel like bitcoin and ethereum did in December of last year,» says Novogratz.
  • Bitcoin was marked by double-digit gains on certain days last year, rising more than 1,000 percent to almost $20,000 in December.
  • Tilray, the Canadian pot stock captivating Wall Street, has shot up more than 50 percent in two days.

Former Goldman Sachs macro trader Michael Novogratz sees a lot in common with the cannabis craze and last year’s record-setting crypto gains. For that reason, he’s betting against it.

«The prices of cannabis stocks today feel like bitcoin and ethereumdid in December of last year,» Novogratz, a closely bitcoin evangelist, said Thursday at the Yahoo Finance All Markets Summit.

This week, as pot stock Tilray jumped 50 percent, Novogratz said he «tried real hard» and found a «cool way» to short it.

«The companies trade up to $28 billion on almost no revenue,» he said. «If I was long them, I’d sell them and if you’re a speculator, I’d get short them.»

Bitcoin, which Novogratz has been a vocal investor in, similarly shot up by double-digit percentages last year. The cryptocurrency has plummeted 66 percent since its high, according to data from CoinDesk.

Novogratz is hardly the only one betting against the cannabis craze. Data from S3 Partners show that short interest in Tilray is around 3.5 million shares, up from about 2.5 million late last month.

This week was an expensive time to bet against the stock. Fees for borrowing Tilray stock, which you need to do to short it, were between 500 and 700 percent, according to S3’s managing director of predictive analytics Ihor Dusaniwsky.

Still, Novogratz is optimistic on the industry long-term and predicted the entire «cannabis business is going to grow, and it’s going to grow relatively rapidly.»

Novogratz launched his crypto merchant bank Galaxy Digital in November, a month before bitcoin hit its all-time high near $20,000. The firm took a $134 million hit in the first quarter of this year, according to its first-ever financial disclosure released in Canada after the company went public.

The former Fortress hedge fund manager told CNBC in November that bitcoin could «easily» hit $40,000 by the end of 2018. He also predicted ethereum, which was trading near $211 this week, could hit roughly $1,500.

Those two cryptocurrencies have gone the opposite direction. Bitcoin is down more than 50 percent this year after starting 2018 above $14,000. Ethereum meanwhile has dropped 83 percent from its high in January, according to CoinDesk.

[:en]

  • Until now, the biggest U.S. bank by employees had resisted deep job cuts, keeping headcount at about 265,000.
  • In the second quarter, Wells Fargo was the only major U.S. bank to report lower year-over-year revenue, and it had the worst efficiency ratio, a widely watched industry metric.
  • Wells Fargo is the only bank that hasn’t significantly improved earnings after the administration’s tax cut, according to one analyst.

Wells Fargo Chief Executive Officer Tim Sloan is cutting jobs with the hope that he can save his own.

Ever since taking over as CEO almost two years ago, Sloan has given top priority to move the bank past the fake-accounts scandal that garnered national headlines in 2016.

Under Sloan, the bank has overhauled managers and its board, launched apologetic ad campaigns and revamped sales practices. But the U.S. bank with the most employees has, until now, resisted deep job cuts, keeping its headcount at about 265,000.

That changed Thursday, when Sloan informed employees that up to 10 percent of positions — as many as 26,500 — would be eliminated over the next three years. In a town hall message broadcast to workers across the country, Sloan explained that Americans’ adoption of digital banking and the firm’s efficiency programs would result in layoffs and attrition.

«The message was, we’re trying to meet customer needs better by cutting staff by 10 percent, which is laughable,» said Charles Peabody, an analyst at Portales Partners. «They’re cutting expenses because they’ve got a revenue problem, not to meet their customers’ needs better.»

Wells Fargo, the nation’s third largest bank by assets, is struggling under the costs and business impact of its ongoing sales practice scandals. In September 2016, the bank said it was firing more than 5,000 employees it blamed for creating fake accounts under a high-pressure sales culture. But after disclosing that the bank opened millions of unauthorized bank and credit card accounts, other abuses were revealed, from bogus charges on pet insurance to the improper handling of wealth management and commercial clients.

This should be boom times

Thanks to «widespread consumer abuses,» the Federal Reserve has limited Wells Fargo from growing in assets, which has stymied loan growth. As a result, Wells Fargo is the only bank that hasn’t significantly improved earnings after the administration’s tax cut, according to Peabody.

This comes despite a U.S. economy that is growing at the fastest pace in a decade. Stocks are at record highs, unemployment is at record lows and interest rates are rising. These are ideal conditions for banks, which take in deposits and make loans, pocketing the difference in interest rates on the products.

J.P. Morgan Chase, the biggest U.S. bank, has said it was opening branches in markets where it didn’t already have a presence. When asked about the threat that technology poses to bank jobs, CEO Jamie Dimon has said he expected the headcount to remain steady because new positions are being created.

In the second quarter, Wells Fargo was the only major U.S. bank to report lower year-over-year revenue, and it had the worst efficiency ratio at 66.7 percent. The metric, followed by analysts and investors, measures how much expenses consume revenue, and the lower, the better. Competitors including J.P. Morgan were almost 10 percentage points better than Wells Fargo.

Peabody figures that by the time the legal and regulatory scrutiny lifts and the bank is allowed to start growing again, the U.S. could be facing a recession. This leads him to one conclusion: Sloan’s job is in jeopardy.

«I think they’re going to have a tough time growing earnings,» Peabody said, «and Sloan is going to have a tough time surviving the next few years.»

The bank denied recent rumors this week that former Goldman Sachs executive and top Trump economic aide Gary Cohn was potentially replacing Sloan. Betsy Duke, chair of Wells Fargo’s board of directors, said in statement that the CEO «has the unanimous support of the board, and this support has never wavered.»

After the cuts were announced, the bank was likely hoping for a boost to its stock. By the end of Thursday’s trading, the shares had climbed just 0.6 percent. Meanwhile, as higher interest rates boosted the whole sector, J.P. Morgan shares ended the day up 0.9 percent.

[:fr]

  • Until now, the biggest U.S. bank by employees had resisted deep job cuts, keeping headcount at about 265,000.
  • In the second quarter, Wells Fargo was the only major U.S. bank to report lower year-over-year revenue, and it had the worst efficiency ratio, a widely watched industry metric.
  • Wells Fargo is the only bank that hasn’t significantly improved earnings after the administration’s tax cut, according to one analyst.

Wells Fargo Chief Executive Officer Tim Sloan is cutting jobs with the hope that he can save his own.

Ever since taking over as CEO almost two years ago, Sloan has given top priority to move the bank past the fake-accounts scandal that garnered national headlines in 2016.

Under Sloan, the bank has overhauled managers and its board, launched apologetic ad campaigns and revamped sales practices. But the U.S. bank with the most employees has, until now, resisted deep job cuts, keeping its headcount at about 265,000.

That changed Thursday, when Sloan informed employees that up to 10 percent of positions — as many as 26,500 — would be eliminated over the next three years. In a town hall message broadcast to workers across the country, Sloan explained that Americans’ adoption of digital banking and the firm’s efficiency programs would result in layoffs and attrition.

«The message was, we’re trying to meet customer needs better by cutting staff by 10 percent, which is laughable,» said Charles Peabody, an analyst at Portales Partners. «They’re cutting expenses because they’ve got a revenue problem, not to meet their customers’ needs better.»

Wells Fargo, the nation’s third largest bank by assets, is struggling under the costs and business impact of its ongoing sales practice scandals. In September 2016, the bank said it was firing more than 5,000 employees it blamed for creating fake accounts under a high-pressure sales culture. But after disclosing that the bank opened millions of unauthorized bank and credit card accounts, other abuses were revealed, from bogus charges on pet insurance to the improper handling of wealth management and commercial clients.

This should be boom times

Thanks to «widespread consumer abuses,» the Federal Reserve has limited Wells Fargo from growing in assets, which has stymied loan growth. As a result, Wells Fargo is the only bank that hasn’t significantly improved earnings after the administration’s tax cut, according to Peabody.

This comes despite a U.S. economy that is growing at the fastest pace in a decade. Stocks are at record highs, unemployment is at record lows and interest rates are rising. These are ideal conditions for banks, which take in deposits and make loans, pocketing the difference in interest rates on the products.

J.P. Morgan Chase, the biggest U.S. bank, has said it was opening branches in markets where it didn’t already have a presence. When asked about the threat that technology poses to bank jobs, CEO Jamie Dimon has said he expected the headcount to remain steady because new positions are being created.

In the second quarter, Wells Fargo was the only major U.S. bank to report lower year-over-year revenue, and it had the worst efficiency ratio at 66.7 percent. The metric, followed by analysts and investors, measures how much expenses consume revenue, and the lower, the better. Competitors including J.P. Morgan were almost 10 percentage points better than Wells Fargo.

Peabody figures that by the time the legal and regulatory scrutiny lifts and the bank is allowed to start growing again, the U.S. could be facing a recession. This leads him to one conclusion: Sloan’s job is in jeopardy.

«I think they’re going to have a tough time growing earnings,» Peabody said, «and Sloan is going to have a tough time surviving the next few years.»

The bank denied recent rumors this week that former Goldman Sachs executive and top Trump economic aide Gary Cohn was potentially replacing Sloan. Betsy Duke, chair of Wells Fargo’s board of directors, said in statement that the CEO «has the unanimous support of the board, and this support has never wavered.»

After the cuts were announced, the bank was likely hoping for a boost to its stock. By the end of Thursday’s trading, the shares had climbed just 0.6 percent. Meanwhile, as higher interest rates boosted the whole sector, J.P. Morgan shares ended the day up 0.9 percent.

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