It’s Equal Pay Day! Just Not For Everyone; JP Morgan Chase Chief Urges…Confidence; Wells Fargo Whistleblower Gets Last Laugh. Sort of.

100% Wrong!

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It might be 2017, but in a lot of ways it may as well be 1917. For some inexplicable reason a pay gap still exists between men, women and people of color. So weird, right? Hard to believe, but on average women still make 80 cents for every dollar a man gets. That’s assuming we’re taking about white, straight women. It all goes precipitously downhill from there. It’s a good thing women have an advocate in the form of Facebook COO Sheryl Sandberg.  Her nonprofit LeanIn.org has just whipped out its latest campaign, with a little help from Funny or Die, called #20percentcounts.  Because it absolutely does. One of the more startling facts of data from the Institute for Women’s Policy Research shows how closing that offensive 20% pay gap would actually lift over three million working women out of poverty. Out. Of. Poverty. In honor of Equal Pay Day, look for 20% discounts from several businesses to draw attention to this issue. For the full list, stop on by at LeanIn.Org.

Sauce-d…

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Well, if Jamie Dimon is saying it then it must be so. The JP Morgan Chase & Co. CEO just regaled us with his annual letter and started by saying just how friggin’ awesome the United States is and how it is “stronger than ever before.” But. It’s a big but. More like a BUT. He then goes on to discuss how “…something is wrong” with our country. He does, after all, sit on the President’s business forum, so I guess he would notice a few things that are…amiss.  For instance, he’s not digging the labor market, or rather there aren’t enough laborers in it. Of course, inner-city schools made a brief appearance in the letter, along with destructive anti-trade policies, infrastructure spending, corporate taxation, and those ever-pesky excessive regulatory rules. Dimon really took a lot of issue with all those banking regulations that are apparently marring the business landscape of the country. In all fairness, he would know a thing or two about that. Dimon feels the public should start showing a little more (un)conditional love towards our great big, fiscally-motivated financial institutions. The takeaway, according to Dimon’s letter? “Confidence is the ‘secret sauce’ that, without spending any money, helps the economy grow.” Got that? Confidence = Secret sauce=economic growth .Who knew?

Awkward…

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In all the talk about Wells Fargo’s illegal activities and all-around bad behavior, it seems a very important figure got lost – that being the very brave whistleblower who called out the bank over its fraudulent account opening activities. Said whistle-blower lost his job in 2010 after calling to complain to the bank’s very own ethics hotline, in addition to his supervisors,  about his suspicions that Wells Fargo was engaging in some problematic business practices. Now, not only was the bank ordered to hire him back, but it also has to pay him…wait for it…$5.4 million. Of course, that number pales in comparison to the $185 million worth of settlements that Wells Fargo has had to cough up already. But still, it’s gotta hurt for Wells Fargo. Well, cry me a river. Because after all, that $5.4 million is meant to cover back pay, damages, compensation and, of course, legal fees. This payout also has the dubious distinction of being the largest award ever ordered by OSHA. Naturally, Wells Fargo is not happy with the ruling and plans to fight it. As for the employee’s plans to return to Wells Fargo, well, that remains to be seen.

 

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Oil-vey! Trump’s Secretary of State Pick Putin Us On; Trump vs. Silicon Valley; Rate Hike Sends Joy Throughout Wall Street

Energized…

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Trump’s latest pick, this time for Secretary of State, has naturally already ruffled more than a few political feathers. Enter Exxon Mobil Corp. CEO Rex Tillerson, a man who happens to be very very cushy with Russia and its fearless leader, Vladimir Putin. If you recall, Russia is very brazenly messing with Ukraine, to the point where the U.S. felt compelled to impose sanctions. Now, the CIA said the country also launched cyber attacks against the U.S. in an effort to influence the election results. But that very same country awarded Tillerson the Friendship Medal in 2013.  Tillerson, who has never held a public office, has been at Exxon, the world’s largest energy firm, for 40 years and during that time spent many many hours cultivating relationships and establishing major business deals with countless foreign countries and companies. But he’ll still need to be confirmed by the Senate. However, considering that former Secretaries of State Condoleeza Rice and James Baker are big fans, not to mention Defense Secretary Robert Gates, he shouldn’t have too much of an uphill battle. By the way, Condoleeza Rice also happens to be a consultant at Exxon Mobil, and Robert Gates was a consultant at one point too. Rumor has it that they all plan to vouch for the CEO.  Lindsay Graham and John McCain, however, are just not that into him, presumably because of his chummy relationship with Putin, of whom they are not particularly fond. Also not in Tillerson’s favor is the fact that Exxon currently has billions of dollars in deals with Russia, not to mention one valued at $500 billion that involves exploring and pumping for oil in Siberia. Those deals can only go forward if the U.S. decides to lift its sanctions against Russia and, fyi,  Tillerson was never much of a fan of the sanctions. And just so you know, according to a filing from a year ago, Tillerson owns $218 million in Exxon stock along with a $70 million pension plan. Shares of Exxon Mobil went up 2.2% on the news of Tillerson’s nomination.

 

Speaking of Trump…

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Tomorrow is a big day at Trump Towers as some of Silicon Valley’s top execs head over to the President-elect’s digs for a little quality time with Donald Trump. Expected to attend the power meeting are: Apple’s Tim Cook, Facebook’s Sheryl Sandberg, Microsoft’s Satya Nadella, Amazon’s Jeff Bezos, Tesla’s Elon Musk and Google’s Sergey Brin and Eric Schmidt…to name but a few. While the agenda’s not public, there are some predictions about what might be discussed tomorrow. There’s the not-so-minor issue of antitrust enforcement and those pesky government demands for user data. But much higher on that list is Trump’s immigration policies and how they have the potential to put a very major damper on the inner workings at many of these Silicon Valley companies. The fact that these companies bring in a lot of employees on special visas, not to mention that they also send plenty of jobs overseas, doesn’t exactly jibe well with Trump’s vision of “Making America Great Again.”  To be fair, Apple did say it has 80,000 employees in the United States and is also responsible for creating another 2 million jobs from all the business opportunities Apple creates. However, Trump did say, in his very eloquent way, that he wants to “get Apple to build their damn computers and things” right here.  Donald Trump is all for establishing major tax reforms and is acutely aware that all these tech companies have a lot of cash offshore. Major reform will help bring that cash back to the States. So its in everyone’s best interests to work together towards that goal, whether they supported Trump’s presidential aspirations or not. And for the record, they did not.

Stocks, and bonds and hikes…Oh my!

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Stocks all over the world rejoiced today by going up while the Dow Jones Industrial Average came thisclose to hitting the 20,000 mark following its 9% surge since Election Day. Actually, the index came within 50 points of the 20,000 mark which sent Wall Street into fits of fiscal joy. The S&P got in on the action by going up .8% to its very own all-time high. The reason for all this excitement is because the Federal Reserve is expected to officially and finally finally announce a rate hike tomorrow, marking the second time in ten years that we get to witness and take part in that elusive increase. Rate hikes are welcome since they signal that the economy is strong and steady in all the right ways. Low interest rates have this nifty little effect on stocks that makes them cost higher. Problem is low interest rates are just no good  for the savers among us who like high interest rates because of the income they get from bonds and bank accounts.  Even though borrowing costs are about to get that much higher, investors are still positively giddy at the prospect that the President-elect intends to usher in an era of potentially lower corporate tax rates, less regulation and lots more infrastructure spending.

 

Sheryl Sandberg: Lean In Women of Corporate America!; Major Tech Company Needs Major Diversity Overhaul; It’s Claw and Order for Wells Fargo

Corporate America Blues…

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Sheryl Sandberg had some thoughts to share with world today in the Wall Street Journal. And when the founder of LeanIn.org and COO of Facebook has thoughts, it’s in everyone’s best interest to hear them loud and clear.  Sandberg wrote about the results of a 2016 study of Women in the Workplace, arguably the most comprehensive annual review of women in corporate America. With 132 companies and more than 4.6 million employees surveyed, the results might shock you, but will mostly disappoint. And here’s why: Women continue to face social pushback for daring to ask for what they deserve. Gasp! Apparently such actions are still viewed as “bossy” and “aggressive.” And that is so weird because men are not viewed that way at all for the same actions. Go figure. But then there’s also the fact that women are underrepresented at every single level and hold less than 30% of senior management roles. As if that’s not bad enough, women are also less likely to get promoted from entry level positions to managerial ones and lose ground the higher they climb up that golden corporate ladder.  The news only gets worse for women of color as they are the most under-repped group with the steepest drop-off as they get to middle and senior management. There is hope, though, as more women are asking and getting promotions and raises.  They are negotiating those items just as much as their male counterparts. Unfortunately, women are still less likely to get promoted.  Which is bananas since research has shown that gender diversity helps businesses get better results, revenue and profit.  Sandberg suggests companies set targets, openly discuss gender stereotypes and start helping businesses get better through gender diversity. Let’s hope 2017’s study shows some markedly different results.

Speaking of a lack of diversity…

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When you count the FBI and U.S. Army as your clients, showering you with hundreds of millions of dollars in contracts, it’s best to foster a diverse workplace that shuns the slightest hint of discrimination. And so we have Palantir Technologies, a data mining company founded by Peter Thiel that is rumored to be valued at about $20 billion. The Labor Department is suing Palantir Technologies over discrminination practices against Asian applicants. If the name Palantir Technologies sounds vaguely familiar, it’s because the company’s resources helped track down Osama Bin Laden. Osama Bin Laden aside, the Labor Department believes the company routinely discriminated against Asian applicants for software engineering jobs. In one example, out of an applicant pool of 130 for an intern position, where 73% of the applicants were Asian, only four Asians were actually hired along with 17 non-Asians.  Palantir charges that the Department of Labor was using “flawed statistical analysis,” yet the Labor Department contends that there is just a one in a billion chance that that selection happened by chance. At least Palantir will be in good company as Facebook and Twitter were also sued for discrimination…by Asian-American women.

And then there’s Wells Fargo…

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The Board of Directors at Wells Fargo might just be clawing back some of the lofty compensation awarded to CEO John Stumpf and former head of community banking Carrie Tolstedt. That decision will be made on Thursday when Mr. Stumpf gets to testify before the House Financial Services Committee to talk about the two million credit and debit cards that were opened without authorization – under the department that Tolstedt ran. Tolstedt conveniently retired in July, by the way. The big question remains as to how much will be clawed back from Stumpf and Tolstedt.  Stumpf took home about $160 million while Tolstedt walked away with around $90 million. Not too shabby considering the massive fraud that happened under their watch.  And as I mentioned in an earlier post, no top level employees were fired or penalized, yet many many low level employees were given their walking papers. Which is weird because lower-level employees usually just follow the orders they’re given. After all, acting unilaterally in a major banking institution is typically frowned upon. Meanwhile, as Wells Fargo continues to stay mum on the subject, the Department of Labor is launching an investigation into the bank’s questionable workplace practices.