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Posted April 02, 2019

Byron King

By Byron King

Wells Fargo is a Dark Comedy

We got an abundance of reader feedback from yesterdays question: Scrap the Second Amendment? Itll take a few days to unwind.

First on the topic, a reader writes:

The Second Amendment is about more than just doing away with the need for a standing army. As a nation we have long considered firearms to be the people's liberty teeth... an anonymous quote that goes way back.

Noah Webster said, Before a standing army can rule, the people must be disarmed; as they are in almost every kingdom in Europe. The supreme power in America cannot enforce unjust laws by the sword; because the whole body of the people are armed.

The Second Amendment, then, has a stated purpose of protecting the country but, judging by the sentiment of early Americans, the greatest need was to protect the country against its own government.

Totalitarian governments are inextricably linked to disarmed populaces. What did the quintessential totalitarians that we all love to hate, the National Socialists of Germany, do when they took over the country in the 1930s? Removed the peoples right to bear arms.

But not all people no, it was selectively applied to the Jews.

Food for thought. More tomorrow.

Your Rundown for Tuesday, April 2, 2019:

Wells Fargo is a Dark Comedy

Heres the headline at website Dealbreaker: Wells Fargo Narrowing Down CEO Candidates To Mostly Women, Hoping Any Of Them Will Take It.

The article continues: it seems like things might even be a little more silent scream-level of desperate than usual. This after the hasty retreat of CEO Tim Sloan was announced last Thursday.

On the news of his effective immediately retirement, shares of WFC jumped and then jettisoned 1.5% Friday.

chart

And its not just the CEO whos exiting; the banks entire cybersecurity team is in shambles. As well, the incoming Head of Technology Saul Van Beurden is having second thoughts about joining the team.

Significant considering Wells Fargos need for a public-image rehabilitation after a massive information breach of account holders information.

This on top of the banks tarnished image as a community bank after the accounts fraud scandal of late 2016 community banking accounts for 50% of Wells Fargos business.

Names bandied about for new CEO reportedly change by the hour but one front runner is Jamie Dimon protege Marianne Lake, CFO at JP Morgan. In truth, Wells Fargo is crossing its fingers, hoping any credible candidate will take on the scandal-plagued bank.

For investors: what to do with Wells Fargo stock? If you want to own a stock like this for the dividend, I think thats fine, says Quint Tatro of Joule Financial, but if youre looking for any sort of capital appreciation or upward bias over the next year or so, I think youre going to be sadly mistaken.

Its a classic value trap.

Market Rundown for Tues. April 2, 2019

S&P 500 is down 3 points to 2,864.54.

Oil is up 31 cents to $61.90 for a barrel of WTI.

Golds steady at $1,294 per ounce.

Bitcoin wow is up $669.73 to $4,821.49. (Not a typo.)

Have a good day. Well talk tomorrow.

For the Rundown,

Aaron Gentzler

Aaron Gentzler

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