Economy

What Could Go Wrong?

JM Ashby
Written by JM Ashby

Wells Fargo, a bank that's been desperately trying to claw its way back from a massive scandal involving the creation of unauthorized accounts, has set a new target for growth.

The bank's lending division says it will once again start selling mortgage-backed securities, the financial devices that imploded in 2008 and caused the Great Recession.

Wells Fargo & Co (WFC.N), the largest U.S. mortgage lender, is hoping this year to sell bonds backed by mortgages without government guarantees for the first time since the 2008 financial crisis, the head of the bank's consumer lending division said on Thursday. [...]

"This year one of our aspirations is to come back to the market with a couple of deals and we're taking a look at making sure we can structure those properly ... to try to test the market and see what we can do there to help bring confidence back," [consumer lending division chief Franklin Codel] said.

This seems like a bad idea, but it's much worse when you consider our current context.

As you may know, the Republican-controlled House Financial Services Committee recently advanced a bill to repeal a majority of the Dodd–Frank Wall Street Reform and Consumer Protection Act signed by President Obama in 2010. If their bill reaches the Senate, which I expect it will, Democrats will almost certainly filibuster it, but that's not a great comfort.

Even if Republicans in Congress fail to pass their bill to repeal Dodd-Frank and it never reaches the White House, I don't believe we can necessarily assume the executive branch is interested in exercising oversight of the financial industry or enforcing current law. There could still be career civil servants at the SEC who still take their jobs seriously, but their boss may not.

The Trump regime is filled with billionaires who got richer after the 2008 financial crisis, not poorer.

If anyone reading this is a customer of Wells Fargo, you may want to consider switching banks sooner rather than later.

  • Scopedog

    The Trump regime is filled with billionaires who got richer after the 2008 financial crisis, not poorer.

    But…but Hillary gave a speech at Goldman-Sachs! She’s beholden to Wall Street!!

    Of course, I’m quite sure that Hillary would have put the kibosh on Dodd-Frank…

  • Seeing that graphic on your posts causes me utter terror

  • muselet

    Oh, good grief. We know how this story ends.

    What’s the over/under on when the banks crater the economy again?

    –alopecia

    • Scopedog

      Soon, actually.

      Remember, in the case of G.W. Bush, there were two wars going on and the aftermath of 9-11.

      In this case, no wars, and everything seems accelerated with Trump and company.

      But no, no one who was paying attention last year would be surprised by this. After all, there was one person who was saying this:

      https://uploads.disquscdn.com/images/ff1935a4d9886187a9ea6cadf4fa5f8a54ce732276c03afa6e3c79ccf7dc826a.jpg

      But you know, emails, Goldman-Sachs speech, she stole it from Bernie even though he lost by four million votes, she was a warmonger unlike that peacenik Trump…

  • Aynwrong

    And polls show that the D’s are seen as the party of the “elites.” A word that has been rendered completely meaningless. If you scream lies and nonsense for eight years straight enough people are just ignorant enough to buy anything.

  • Badgerite

    Seriously. If the incentives remain the same, how do they expect a different outcome?

    • They don’t want a different outcome since they made profits on the 2008 Recession.

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      • Draxiar

        Bingo. They got bailed out while the their customers got sold out.

  • ninjaf

    Ugh…our mortgage was sold to Wells Fargo almost right after we signed the paperwork — we sent our first payment to them, if that tells you how long it took. It has been on my list of things to research, but has been a low priority. I don’t think there’s anyone “clean” and credit unions that don’t have a requirement like being a state employee are hard to come by in our area, for some reason.

    • swift_4

      It’s extremely important to get a mortgage that can’t be resold. Otherwise, before the ink is dry it will be sold to an economy-destroying bank.

      Unfortunate if you don’t have credit unions where you are. I love my credit union. All of my finances are with them.