Friday Roundup

Friday Roundup
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What Should We Do About The College Debt Crisis? 

In full disclosure, if Elizabeth Warren wins and becomes the next president of the United States, my recruiting business—placing Compliance, Legal and Regulatory professionals—will go through the roof. Warren is rabidly anti-Wall Street and a strident proponent of regulations. She was the person who literally thought up and created a new regulatory agency, the Consumer Financial Protection Bureau, in response to the devastation caused by the financial crisis. While President Trump is fervently against regulations, as he views them as anathema to business growth, there is no doubt that Warren will immediately go after Wall Street and all of its shenanigans. 

Nevertheless, Warren is not going to win. No, it’s not because of the whole Native American thing or her wearing the same sweater and slacks outfit everyday and coming across as a nerdy elementary school teacher. Her defeat will be based on this one particular interaction. 

At the end of some talk or whatever it was, there were a few people lined up to speak with her. A normal-looking, middle-aged guy politely asked if he could pose a question. The dad then reasonably inquired (I’ll paraphrase it because I really don’t want to watch the video 20 times to get an exact quote, but you can listen to it here):

DAD: “My daughter is in school. I saved all my money just to pay student loans. Can I have my money back?” 

WARREN: “Of course not!” 

DAD: “So, you’re going to pay for people who didn’t save any money and those of us who did the right thing get screwed?”

When it comes closer to the election, do you know what is more important to people than being a Democrat or Republican? A parent who cares about their kids and being treated fairly. There are a lot of hard-working Americans in this country who hold two jobs, work crazy hours, put off taking vacations, drive beat-up cars and eat out less frequently to save money so that their children can attend college in the hopes of having a better life than they do.

Warren basically said to this man’s face, “You’re a sucker for following the rules.” She plans to reward people who made bad decisions and took on too much debt, partied too much in school instead of studying and selected a major that may have been fun, but did not lend itself to a reasonably paying job. I’m not victim blaming. I believe that it is insane to force a 17 or 18-year-old kid to make such a life-impacting decision at a tender age—an age where you can’t vote or drink alcohol legally, but can sign a contract that binds you to a staggering long-term debt burden of hundreds of thousands of dollars. I don’t blame the kids because they *are* kids and they’re forced by societal pressures and the dictates of the job market to attend college, so they don’t have much of a choice. In most neighborhoods, if a kid doesn’t go off to college, they are viewed as if something is wrong with them. It’s a terrible position we put our young people into.

If Warren’s plan is put into place, it would reward some people, but penalize those who scrimped, saved and worked their buts off to pay their debts.

I have a solutions for Warren. Liz is a big fan of my work, so I know that she’ll read this. If she follows this simple, yet elegantly beautiful advice, she may once again have a chance at winning. Help restructure the college loans on a case-by-case basis depending upon the merits of the individual’s circumstances. If some people are getting their loans canceled or offered some financial breaks, this reward should also be afforded to the students and parents who followed the rules, paid back their loans or paid the tuition in full. This seems like a fair start to coming up with a resolution.

The next step is to stem the unending increases in college costs!

The Coronavirus Is Starting To Get Scary: Cities Closed Off, Travel Halted and More Deaths

Yesterday, we wrote “Is The Coronavirus The Start Of A Zombie Apocalypse?”, which covered the Coronavirus that is sweeping China and moving swiftly to other countries and could potentially turn into a horrific plague of biblical proportions.

China has clamped down on travel, as the virus has already claimed 26 lives and about 830 are confirmed to have the virus. Travel restrictions will impact roughly 20 million people in over 10 cities. There have been deaths confirmed outside of Wuhan, the city where the virus started.

Wuhan is on lockdown as bus, subway and ferry services have been suspended and all outbound planes and trains cancelled. Residents have been told not to leave and roadblocks have been implemented. 

A small number of cases have emerged in other countries, including in Thailand, the U.S., Taiwan, South Korea, Japan, Vietnam and Singapore.

Fortunately, I don’t have a life and devote myself to work, so I was up late at night conducting research into this potentially devastating and lethal virus. Just so you and I are on the same page, when I say research, I’m referring to scrolling through Twitter. 

For those of you heartless folks that haven’t been following this matter, I’ve put together a number of tweets that contain pictures and short videos of what’s going on in Wuhan, China, the epicenter of the new upcoming plague

Doctors sound scared and angry. 

Person falls down. I am kind of suss about this one, as he puts his knees out to brace the fall. Who does that when they die standing up? 

And you thought our waiting rooms in the U.S. are bad! 

Why are Star Wars storm troopers involved?   

I’m not a doctor, but if you’re not sick already, wouldn’t this crowd make you sick? 

How did Squidward from Spongebob get in here? 

These guys don’t seem to know what to do. 

“Oh, flight attendant! May I have a white wine please? You’re a doll, thanks!” 

I hope this is a fake video. 

Oh, so that’s where we got the virus from—this d*ck!

MOM: What would you like for dinner?

DAUGHTER: I’m in the mood for bat today.

If you wonder why I’m treating this in a somewhat cavalier manner, it’s just that I’m old enough to have seen this play out a number of times. Yes, this is scary AF. People have died and more will get sick. That, of course, is terrible. However, the media loves to make this out as if it’s the end of the world. So far, every single time the mass media portended doom, they were wrong and we are still here. I’m confident that this will all be resolved. 

I can’t guarantee that these are true and accurate because you may not be aware, but not everything online is true. Shocking, right?

Wells Fargo’s Former CEO Is Fined And Banned From Banking

John Stump, who formerly headed Wells Fargo as the bank’s CEO, was kicked out of banking and hit with a $17.5 million fine. 

These slap-on-the-wrist measures were taken by regulators in response to his presiding over the bank’s unauthorized account opening scandal. Regulators, including the Office of the Comptroller of the Currency, said it’s investigating additional former executives concerning their involvement.  

It was alleged that Wells Fargo engaged in a scheme in which bank executives pressured employees at bank branches to aggressively cross-sell products. This involved mortgages, credit cards, bank accounts and other products and services. The problem arose when Wells Fargo employees crossed the line and created millions of savings and checking accounts for customers without their knowledge or approval.

Bank branch staff were said to have used their own contact information on forms to prevent customers from discovering the fraud. Employees were accused of creating fraudulent checking and savings accounts by moving money out of existing accounts into the new ones. This was made possible by “pinning”— a process in which the customers PIN number was set to “0000,” so that bankers could readily control their client’s accounts and keep them in the dark.

The bank’s clients started to notice and question unusual fees showing up on accounts that they didn’t know they held. The slew of complaints drew the attention and ire of regulatory agencies. The fraud started to gain widespread attention in 2016 when a group of government regulatory agencies fined the company a combined $185 million. Wells Fargo subsequently confronted a number of other civil and criminal lawsuits and paid out roughly $2.7 billion so far. 

Thousands of rank-and-file workers were blamed for opening up unauthorized accounts to earn extra commission and summarily fired.

When Stump took early retirement from Wells Fargo (before he was kicked out), he left with about $130 million in stock and other compensation, according to SEC filings. This figure does not include all of the money he earned at the bank over his multi-decade career. A $17.5 million fine—relative to his overall compensation—is so bad, especially in light of his presiding over an epic rip-off of his customers. The chances are likely that most, if not all of his fines and legal fees, will be picked up by errors and omissions insurance policies.

The big question is whether or not Stumpf and others will be subjected to a criminal investigation, though the American Banker reported that they will. Until that happens, we’ll remain skeptical. It’s always the little guy who gets in trouble. Fat-cat CEOs with power, wealth and political connections always seem to skate free. 

Everyone Loves Millennials

According to LinkedIn and USA Today, Millennials will be highly coveted in the job market over the next bunch of years. Seventy-five percent of the 2,406 U.S. hiring managers surveyed in a recent study replied that they will focus their recruiting efforts on Millennials. The young up-and-coming Gen-Zers are the second pick. The often-forgotten generation after the O.K. Boomers, Gen-X, comes in third place. The conclusion drawn was that the move makes sense since Millennials and Gen-Zers make up roughly half of the world’s population and about 10,000 Baby Boomers are retiring every day. 

I’d like to not so humbly offer my take. There are two major reasons why hiring managers want Millennials and Gen-Zers: (1) They are less expensive than Boomers and Gen-Xers and (2) Ageism. See, I didn’t even have to run a study and I’ve already got the right answer.

Companies want to save money and cut costs. It’s economically logical to swap out a 47 year old earning a $150k base salary with a person who is between 28 and 32 years old earning $50k to $65k. There is also the positive prejudice that younger employees will have more energy, drive and motivation, whereas their senior colleagues are just biding time until retirement.

It’s not fair to judge someone by their age, but unfortunately, it happens all the time.

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