Wells Fargo Managers Accused of Pressuring Bankers 10 October 2016, 18:45

By AnnaMaria Andriotis and Emily Glazer 

Wells Fargo & Co. managers pushed bankers to sign up customers for potentially costly overdraft protection that they didn't always need or realize they were getting, according to current and former bankers and managers.
Members of Congress expressed concern about potential overdraft problems at the bank during two hearings last month with Wells Fargo Chief Executive John Stumpf. He was called to Capitol Hill after the bank in September agreed to a $185 million fine and enforcement action over what the Consumer Financial Protection Bureau called the "widespread illegal practice" of opening unauthorized accounts.
The CFPB is also reviewing overdraft-fee practices broadly at banks, the agency has said.
A Wells Fargo spokeswoman said the bank has adhered to a 2010 regulation that requires customers to opt into overdraft protection. She added that procedures "all clearly demonstrate" to customers that "this is an optional service that requires specific customer consent prior to enrollment."
Overdraft protection allows customers to complete a transaction even if they don't have enough money in a checking account. The largest banks charge a fee, typically about $35, per overdrawn debit-card or automated-teller-machine transaction.
Among the CFPB's concerns: how consumers agree to opt into the potentially costly service. Earlier this year, the CFPB sent a letter to the 25 largest U.S. retail banks, urging them to offer accounts that don't permit customers to spend more money than they have. The agency is also considering further regulation of overdraft services, it has said.
Overdraft fees have been a concern of regulators for some time. This is because of costs and moves by some banks in recent years to reorder transactions, posting larger transactions against an account first to increase chances a customer will overdraw the account and be charged numerous fees.
In 2010, a Federal Reserve regulation took effect requiring banks to get customers' permission to opt into a service that would allow debit-card and ATM transactions to clear, and a fee to result, even if a checking account doesn't have sufficient funds.
Before 2010, banks didn't need customers' permission in most states for the service and welcomed the fee income. Banks became concerned the regulation would crimp this income stream.
That prompted individual managers at Wells Fargo to push personal bankers, staff in bank branches who deal with retail customers, to find new ways to get customers into the service, according to current and former personal bankers and managers in Florida, California, Georgia, Nebraska, Virginia and Texas.
At a Tucker, Ga., Wells Fargo branch, managers told personal bankers in staff meetings to present debit-card overdraft protection as a requirement for checking-account customers, according to Oscar Sevilla, a Wells Fargo personal banker from 2012 to 2013.
"We just used to say it comes with it to basically suggest that there wasn't an option," said Mr. Sevilla, now self-employed in the exporting business. He is also one of six named plaintiffs in a recently filed federal class-action lawsuit in California against Wells Fargo alleging employees were "encouraged and directed" by managers "to use various illegal schemes to open accounts fraudulently."
The bank said it disagrees with the allegations and will vigorously defend against the suit.
The overdraft protection didn't count toward bankers' daily sales goals, so it didn't affect bonuses. But there were smaller incentives: In at least one branch, there were at times a daily $15 gift card to Subway for the personal banker who got the most customers to opt in and gift cards of as much as $100 for the banker with the highest quarterly figure, said Matt Boisdore, who worked as a personal banker in a San Diego Wells Fargo branch from 2009 to 2011.
The Wells Fargo spokeswoman said bankers were never compensated for getting people into a debit-card overdraft service. She said the bank encourages branch managers to reward teams at their discretion with food or gift cards "for going above and beyond for a customer."
On a Wells Fargo employee conference call in 2011, Jodi Blackwood, then a product manager for consumer deposits and now a national sales manager for the bank, told Richmond, Va., area employees to put aside worries they were putting customers into a bad product, referring to overdraft protection, according to a recording of the call reviewed by The Wall Street Journal. "I think we get a little nervous when we talk about it [because] we think we're going to be talking about something that's going to be bad for the customer, but customers just want a choice," she said.
On the call, she told employees to make 100% of customers aware of overdraft protection, including those who struggle to keep a balance in their accounts and for whom "it might be bad." She coached employees to present strategies in which signing up for overdraft services would help customers get their transaction approved, including how it could help them pay for a dinner out and avoid "an embarrassing situation."
A former branch banker in Richmond who was on the call described it as "fear-based selling." After the call, bankers were told they had to report at the end of each day how many customers they persuaded to opt in and felt "major pressure" to do so, he said, though that requirement later ended.
"You have to realize, people who walk into the branch are typically...very unsophisticated financially, so when their banker tells them to do something, they usually did," he said.
Ms. Blackwood declined to comment through a bank spokeswoman. "This is from a time period where this was an entirely new service," said the spokeswoman. "It was a very large shift [and] we were talking to customers in a very different way, so there were calls around the new offering."
Some bankers placed customers into overdraft services without them realizing it, said Jan Taylor, who was a banker at Wells Fargo from 2006 to 2014 in Texas.
After the opt-in regulation, she said, employees would often tell customers to "sign this and this and this" when opening an account, failing to explain what they were signing. And most customers didn't ask, said Ms. Taylor, who said she was fired from the bank for failing to meet sales goals and now works at a credit union.
Write to AnnaMaria Andriotis at annamaria.andriotis@wsj.com and Emily Glazer at emily.glazer@wsj.com

(END) Dow Jones Newswires
October 10, 2016 14:45 ET (18:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc. 

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10 October 2016, 18:10

U.S. stocks rose as a fresh climb in oil prices spurred gains in shares of energy companies.

The Dow Jones Industrial Average on Monday rose 107 points, or 0.6%, to 18347. The S&P 500 gained 0.5% and the Nasdaq Composite added 0.8%.

Energy shares in the S&P 500 rose 1.5% and U.S. crude prices increased 3.1% to $51.35 a barrel as Russian President Vladimir Putin supported international efforts to limit oil supply .

Analysts expect volatility in oil prices this week as energy companies and crude producers meet in Istanbul for the World Petroleum Congress, where members of the Organization of the Petroleum Exporting Countries will try to persuade non-OPEC producers, such as Russia and Norway, to cut production.

Exxon Mobil and Chevron were among the biggest gainers in the Dow industrials, rising 2% and 1.9% respectively.

Shares of Mylan NV rose 9% after the U.S.-listed pharmaceuticals firm agreed to pay $465 million to settle allegations that it overcharged the government for its EpiPen products.

Analysts said trading volumes were thin due to holidays in Japan, Hong Kong and Canada, as well as Columbus Day in the U.S., with the Treasury market closed.

Wall Street had ended a touch lower Friday following a slightly softer-than-expected monthly jobs report. Still, the jobs figures ultimately did little to shift investors' expectations for the course of U.S. interest rate rises.

U.S. Federal Reserve Vice Chairman Stanley Fischer said Sunday that the most recent jobs report was "solid, showing continued improvement" and that the decision to hold rates steady in September was a "close call."

Investors were also looking ahead to the start of the third-quarter earnings season, which gets under way later this week with reports from Alcoa and big banks including J.P. Morgan and Wells Fargo.

"If we can somehow get to flat in earnings, that would be very supportive of equity markets in general," said Jon Adams, investment strategist at BMO Global Asset management.

"At some point, we need to see top-line growth to justify [current] valuations," he said.

Stocks in Europe recovered from an early fall in the banking sector. The Stoxx Europe 600 rose 0.7%. The euro fell 0.6% against the dollar to $1.1139.

Investors in the region also continued to focus on negotiations between the U.K. and the European Union. The British pound was down 0.6% against the dollar at $1.2361 after briefly falling as much as 6% in a few minutes during Asian trading hours Friday, while the yield on 10-year U.K. gilts climbed to 1.02%. Bond yields rise as prices fall.

European Central Bank President Mario Draghi said Saturday that the U.K.'s vote to leave the EU was very significant. "To think that it won't have any consequence would be to hope for too much," he said.

Despite a recovery in the currency, investors said Friday's steep fall highlighted continued concerns about the U.K.'s vote to leave the European Union and its implications for sterling.

"The U.K. in many ways is looking like a vulnerable emerging market economy, with a huge current-account deficit and alarming political trends," said Chris Scicluna, head of economic research at Daiwa Capital Markets Europe. He expects the British currency to continue to decline sharply against the dollar in coming months.

Gold rose 0.7% to $1,261 an ounce, according to FactSet.

Earlier, Shanghai stocks gained 1.4% as Chinese markets reopened from a week-long holiday, and the Chinese central bank set the yuan's reference exchange at a six-year low against the dollar.

Alison Sider contributed to this article

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Usd Jpy This Week (October 9, 2016 to October 15, 2016)

Usd Jpy Long term Trend @ W1 chart.

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Prepare to Lose, Trade to Win

(I thought I’d end the year with this classic. Hope you have a great year ahead of you!)

We’ve all gotten our hearts broken at some point. And no, I’m not just talking about getting dumped by your high school sweetheart. The forex market also has its own way of making you cry yourself to sleep, leaving you broken and feeling helpless.

Sure, you might say that you’ve stopped binging on chocolates and that you’re already over it. But have you found yourself not pulling the trigger on a setup because it reminded you of a supposed “Trade of the Year” that didn’t go your way?

Have you recently experienced a big loss or a series of losses that dealt you a big emotional blow? Do you often get emotionally rocked by what you feel should be normal trading stress? Are you unable to break bad habits, even though you are aware of them?

If you answered “yes” to these questions, then you may be suffering from emotional trauma.

Emotional trauma usually occurs when we experience a threat to our safety and security. Although it helps us keep ourselves from repeating the same mistakes, it can also be paralyzing for a trader. It can lead to the creation of bad habits detrimental not only to our psychology, but also to our trading accounts.

So how do you prevent emotional trauma?

First of all, you have to practice sound risk management.

For traders, traumatic experiences often arise from poor risk management. Trading large positions, using ill-placed stop losses, and being overly aggressive can threaten one’s account, and therefore, one’s sense of financial security.

Getting stopped out when your stop loss was properly placed and risk-adjusted shouldn’t be traumatic because losses are inevitable. However, choosing not to use a stop and losing half your account for it will definitely give you nightmares.

Secondly, you must prepare for the worst but plan for the best.

Prepare to take hits.

Take after 8-division world champion and pound-for-pound best boxer, Manny Pacquiao. He goes through a grueling 8-week training camp for each of his fights, which includes an an unusual practice of asking his trainers to strike his muscles with a hard stick.

This drill toughens his body and prepares his mind for blows he may take come fight night. He prepares himself to take hits, but always fights to win.

It’s all about mental preparation. If you set your mind to accept hits and blows, then almost nothing will jar your focus. But remember, though we mentally prepare ourselves for the possibility of a loss, we must NEVER lose sight of and always work towards our ultimate goal – to win!

In other words, we must prepare to lose, but always trade to win.

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Strong Jobs Data Push Greenback Through Key Chart Points

The US jobs data was considerably stronger than expected and leave no doubt about the December meeting being live despite the year-end considerations that some had seen tying the Fed’s hands. The dollar broke through key chart points near JPY122 and $1.08 for the euro. 

Nonfarm payrolls leapt 271k, nearly 100k more than the consensus anticipated.  The August and September job growth was revised higher by a minor 12k.  September was actually revised down by 5k, with August being revised up 17k. 

The unemployment rate slipped to 5.0% while the participation rate was unchanged at 62.4%.  The underemployment rate fell to 9.8%.  It is the first sub-10% print since before the Great Financial Crisis.  The 0.4% increase in average hourly earnings was twice the expected increase and lifts the year-over-year rate to 2.5%, a new cyclical high. 

Private sector payrolls added 268k jobs. The 3k increase in government workers was the least in several months.  Over the July-September period, the government add an average of 29k a month. 

It is difficult to find the cloud in the silver lining as economists are often wont to do.  Even the household survey, which sometimes is not consistent with the establishment survey, saw a 320k increase in jobs, offsetting in full the 236k decline in September.  Manufacturing employment that had fallen for two consecutive months was flat, which compares to expectations of a 5k decline, and weakness of the ADP survey and soft manufacturing ISM employment. 

US interest rates have moved sharply higher response to the jobs data.  The 10-year yield is near 2.30% (+7 bp), and the 2-year is near 92 bp (+9 bp).  The implied yield on the December Fed funds futures has pushed 2 bp higher.    

Canadian jobs data were also better than expected.  It grew 44.4k jobs compared with a consensus estimate of 10k.  The unemployment rate ticked down to 7.0% even though the participation rate rose to 66.0% from 65.9%.  The consensus had expected a decline in the participation rate.  Full-time jobs grew by a lesser 9k after a nearly 62k loss in September.  Despite the local data, the Canadian dollar is being overwhelmed by the surging greenback. 

The divergence theme was underscored this week, and the US jobs data keep it central to the investment climate.   A dovish Draghi, coupled with unexpected declines in German factory orders and industrial output, keeps open the possibility that the Federal Reserve and ECB move in opposite directions next month.  The Bank of England was also more dovish than expected, making sterling one of the weakest currencies in recent days.  

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Why You Should Be Aware of Changing Forex Market Themes

It is often said that success comes to those who embrace change. Successful businessmen, for example, create new products and services that cater to the ever-changing demands of customers.

forex market themesThe age-old saying, “The only thing constant in life is change,” isn’t any less true in trading. Of course, adapting to change isn’t easy, but as a forex trader, your job is to be flexible. One distinguishing trait I’ve noticed among successful traders is their ability to figure out market themes by synthesizing patterns from different assets and time frames.

For instance, just because you only trade forex doesn’t mean you don’t have to keep tabs in other financial markets. We’ve learned from the Intermarket Correlations section of the School of Pipsology that currencies also share relationships with commodities, bonds, and stock indices.

Now, think of themes as theories that traders create to make sense of what’s going on in the markets. But of course, a theory can only be good if it truly captures trends in the market. If it is based merely on one’s biases, then you might as well be trading with your eyes closed.

How can we, as traders, discover market themes?

The first step is gathering data. Before you even THINK of putting a trade on, read up on what is happening in the economic landscape. There are many ways to do this such as reading major news websites or reading up on Pip Diddy’s Top Market Movers blog post at the end of each week.

Follow this up by looking at the most recently released important economic reports. Check whether they impressed or disappointed and if/how they affected market sentiment. Ask yourself questions like “How did the market react?”, “Is the market bullish?”, and “Is the market bearish?”

After investigating the fundamental background and market sentiment, you can move on to the technical aspect to find a valid forex setup that supports your biases. Look for patterns, trends, and indicator changes which hint that price may move with the market theme.

Discovering market themes is about combining all of the key data points and turning it into a workable trading framework. It’s like putting together a jigsaw puzzle from scratch: you begin with the edges and slowly build up the middle to form a complete picture.

For example, a news report from the U.S. comes out better than expected, and the stock market soars but the dollar ends up getting sold-off. This can be a sign that the market is extremely bullish and hungry for risk. Using this information, you look for a technical swing setup that enables you to sell the U.S. dollar versus high-yielding currencies, like the Australian dollar, at an appropriate price.

Some of you are probably saying that this only applies to those who prefer to trade higher time frames. However, as a scalper or day trader, knowing what the expectation is for a particular economic report could also work to your advantage.

As with most things related to becoming a better trader, learning how to properly decipher the market theme is difficult. It requires patience, time, and hard work. But the fact is, properly identifying market themes is very important in trading.

The clearer the overall market picture is, the easier it is for you to determine whether the trade is truly going in your favor or it is simply faking you out. Also, more than simply going with where the market is taking you, having a set market theme allows you to ANTICIPATE the direction to which it is headed. Now wouldn’t you want to be capable of that in this volatile market environment?

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How to Incorporate Trading Psychology in Your Forex Journal

Sure, keeping track of your forex stats is awesome. But numbers are just gonna be numbers, and they don’t really tell the whole story. If you’ve already caught yourself thinking that you’re doing something wrong over and over again but you don’t know what it is, maybe it’s time you start a psychological journal, too!

You know how the market has tendencies? Well, in the same way that it tends to react to market events and environments in certain ways, individual traders also have repetitive reactions and behavioral tendencies. However, we often overlook them and how they may be affecting our forex trading performance.

See, through our lifetime we’ve developed coping mechanisms to help us deal with distress. For example, the first time you touched a pot of boiling stew, you’ve learned that your fingers get burned and that it will probably happen again the next time you do it, right? To avoid pain, you’ve learned to use kitchen mitts or avoid touching the pot until it has cooled. Eventually, coping mechanisms like these turn into habits and come off naturally when we are faced with similar situations.

Although we subconsciously develop these these knee-jerk reactions to keep us from feeling pain, they may also lead us to make bad/impulsive trading decisions. Think about it: How many times have you closed a winning trade early the second the market moved against you by a few pips? And you’ve probably beaten yourself up for doing over and over again even though you knew that you could have ended your last trade with a bigger win had you followed your plan.

And this is why you should have a psychological journal. It’s a tool that will help you recognize your character patterns. If you’re wondering how you can get started, here are a few tips:

Describe the current forex market situation.

Try to describe the current market situation and why your trade setup could work in that specific environment. Ask yourself the following questions: What are the dominant market themes right now? Is risk on or off? Am I about to take a trade that’s in line with these themes and risk sentiment?

How do you feel?

Aside from the market environment, also include your thoughts and emotions while trading. Sure, it may feel funny to write about your feelings at first, but somewhere down the road you’ll recognize some behavioral patterns. If you wanna write about having a terrible hair day or having too much coffee in the morning, go ahead! It’s important to note down all the possible factors that could have an impact on your decision-making.

Take note of the outcomes.

Finally, jot down the outcomes of your trading decisions to help find out what emotions have a positive or negative influence. To pinpoint possible issues, ask questions like:

• Did you close your trade too early because you were feeling extra impatient that day?

• Was it difficult for you to concentrate and why?

• Did you move your stops farther because you were too hungry for a win?

• Were you feeling confident in your trade idea that you decided to increase your position size?

Bear in mind that the goal is to recognize behavioral patterns and their usual consequences. From this, you can identify those scenarios that negatively impact your decision-making and just decide to refrain from trading if those patterns recur. Soon enough you’ll be able to build enough awareness of these behavioral patterns, clearly identify what causes you distress, and be able to keep those situations from damaging your trading account.

From

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