Econintersect: Every day our editors collect the most interesting things they find from around the internet and present a summary "reading list" which will include very brief summaries (and sometimes longer ones) of why each item has gotten our attention. Suggestions from readers for "reading list" items are gratefully reviewed, although sometimes space limits the number included.
This feature is published every day late afternoon New York time. For early morning review of headlines see "The Early Bird" published every dayin the early am at GEI News (membership not required for access to "The Early Bird".).
Warren Says Wells Fargo's Stumpf Should Resign, Face Criminal Investigation (Bloomberg) John Stumpf, the Wells Fargo & Co. chief executive officer, took fire from Democrats and Republicans alike in a Congressional hearing toda. Stumpf was blasted for his handling of a scandal over the opening of more than 2 million accounts without customers’ authorization, as employees sought to meet cross-selling targets.
“In 1998, I was hired by Wells Fargo Home Mortgage as a 'Home Mortgage Consultant' or loan officer. I worked for Wells Fargo Home Mortgage ('Wells Fargo') until December, 2007. After a period of time, I was promoted to Sales Manager. I told DOJ over six years ago about Wells Fargo's quotas. At that time it was subprime loans. A loan officer had to fund three subprime loans per month. If there was a quarter when that didn't happen, they were fired. So the result is prime borrowers were put in subprime loans so that the loan officer kept their job.
"[John] Stumpf was also part of the management team that stated the company goal was to have Wells Fargo's fixed cost paid by the subprime division. Once Countywide went under, Wells Fargo was the #1 subprime lender in the country, specifically [in the] third quarter of 2007. The media keeps whitewashing Wells Fargo as this great lender that avoided all the pitfalls of the other lenders in the mortgage meltdown. No, Wells Fargo was the worst, they are just pure evil, [but] they hired more lawyers and more PR people to spin it Wells Fargo's way. They are all riding the stagecoach to hell.”
Boehner Joins Influential K Street Firm (Roll Call) The former House speaker is returning to Washington, but through a different revolving door than when he was an elected official. Former House Speaker John A. Boehner is cashing in on K Street almost one year after resigning from Capitol Hill. The Ohio Republican will join Squire Patton Boggs, a global law firm that traces its roots to one of Washington's oldest and most prominent lobbying practices. The shop is also the professional home of several former Boehner congressional aides and to former Senate Majority Leader Trent Lott of Mississippi and Democratic ex-Sen. John Breaux of Louisiana. Boehner will serve as a strategic adviser and will focus on global business development in the United States and abroad. See also Boehner Joins Tobacco Company Board.
Next time you walk outside, pay really close attention to the space around you. Look at how much land is devoted to cars — and nothing else. How much space parked cars take up lining both sides of the street, and how much of our cities go unused covered by parking lots.
It becomes obvious, we’ve built our communities entirely around cars. And for the most part, we’ve built them for cars that aren’t even moving. The average vehicle is used only 4% of the time and parked the other 96%.
Syria conflict: UN's Ban Ki-moon blames government for most civilian deaths (BBC News) UN chief Ban Ki-moon has launched a stinging attack on Syria's government, saying it has killed the most civilians in the five-year civil war. In his final address to the UN General Assembly, Mr Ban also said those who supported the opposing sides in the conflict had "blood on their hands". It came as the UN suspended all aid convoys in Syria after a deadly attack on its lorries near Aleppo on Monday. See also next article.
UN chief rails against leaders with 'bloody hands' in Syria (Associated Press) U.N. Secretary-General Ban Ki-moon railed Tuesday against leaders who keep "feeding the war machine" in Syria as he bowed out of the world stage, while President Barack Obama said there was no military solution to the five-year conflict and described a globe in the throes of a contest between authoritarianism and democracy.
Russia 'to revive the KGB' after Vladimir Putin wins biggest majority (The Telegraph) Russia plans effectively to revive the KGB under a massive shake-up of its security forces, a respected business daily has reported. A State Security Ministry, or MGB, would be created from the current Federal Security Service (FSB) , and would incorporate the foreign intelligence service (SVR) and the state guard service (FSO), under the plans. It would be handed all-encompassing powers once possessed by the KGB, the Kommersant newspaper said, citing security service sources.
Other Scientific, Health, Political, Economics and Business Items of Note - plus Miscellanea
The New GICS Real Estate Sector and S&P U.S. Benchmarks (S&P Dow Jones Indices) The Global Industry Classification Standard (GICS) is expanding the sectors in the S&P U.S. Indices in September 2016 from 10 sectors to 11. The Financial Sector is splitting out a new REIT Sector. This is the first reconfiguration in 17 years. The following indices will be affected: S&P 500®, S&P MidCap 400®, and S&P SmallCap 600®. The data for the S&P 500 (data for other two indices is shown in article) is given in the following table:
Because of the unique characteristics of REITs -- most income is passed through tax-free as dividends -- it makes sense to categorize REITs separately from banks and brokerages. The big concern to my contrarian eye is the timing. The appeal of REITs is their high dividends in an era of low bond yields. However, these changes are occurring just as the Federal Reserve is on the verge of raising short-term interest rates. The timing of the overhaul could easily prove later to have been problematic.
These changes are occurring after tons of cash have flowed into REITs. According to data compiled by Bloomberg, the REIT sector has attracted $68 billion in exchange-traded-fund assets, and “the group has more money invested in it than any of the other main industry classifications and has attracted the most cash since 2010.”
Land's Share of Home Prices | Long-term Interest Rate (Catherine Mulbrandon, Visualizing Economics) CM has contributed to GEI. See also preceding article. Econintersect: Will the trend of rising land value share of home prices reverse and head lower if the interest rate trend changes to a new period of rising interest rates?
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