#_ymedia:video-channel=investing

[julialaroche-blog1]

Wells Fargo beats expectation, new CEO says he's 'deeply committed' to restoring trust

Wells Fargo (WFC), now the third-largest US bank by assets, reported third-quarter earnings that beat expectations.

The bank booked earnings of $1.03 per share on revenue of $22.3 billion, topping analysts’ expectations of $1.01 per share on revenue of $22.2 billion.

The bank has recently been rocked by a scandal involving employees at the retail bank opening up approximately 2 million fraudulent accounts to meet sales targets. More than 5,000 employees were subsequently fired.

On Wednesday, Wells Fargo announced that John Stumpf, a 35-year veteran at the bank, would retire as chairman and CEO, effective immediately. The sudden retirement came just two weeks after Stumpf had to testify on Capitol Hill over the issue at the retail bank. Stumpf’s forfeited unvested equity awards are valued at approximately $41 million, the earnings release noted.

Tim Sloan, the president and COO, was made CEO.

“I am deeply committed to restoring the trust of all of our stakeholders, including our customers, shareholders, and community partners. We know that it will take time and a lot of hard work to earn back our reputation, but I am confident because of the incredible caliber of our team members. We will work tirelessly to build a stronger and better Wells Fargo for generations to come,” Sloan said in the earnings release.

In the earnings presentation, the bank provided an overview of an independent review into the deposit and credit card accounts.

The bank also included information on changes its making in wake of the account scandal.

A conference call will be held at 10 a.m. EST.

Elsewhere, JPMorgan Chase (JPM) and Citigroup (C) also posted modest earnings beats for the third quarter.

[seana-smith-blog]

How the US Army prepared one CEO for success in the NHL

Plagued by bankruptcy fears, the National Hockey League’s Florida Panthers have been bogged down with money problems off the ice. Now, after shaking up its front office and reallocating funds, the team is focused on bringing the Stanley Cup home to South Florida.

The Panthers have an unusual plan for revamping its business: They’re bringing a military-type attitude to the front office. Panthers chairman, owner and governor Vincent Viola, who graduated from the U.S. Military Academy at West Point and served in the 101st Airborne Division, has hired seven front-office staffers with military backgrounds.

Among the recent hires is Matthew Caldwell, president and CEO of Sunrise Sports and Entertainment, the parent company of the Florida Panthers. Caldwell told Yahoo Finance’s Seana Smith in the video above how he is taking the skills he learned as a captain in the US Army to the National Hockey League.

“There are a lot of similarities between soldiers and hockey players. They take a team-oriented approach,” said Caldwell. “It’s a blue collar, hard-work mentality. Being in the Army for five years and leading soldiers from every ethnicity, every background, really helps you prepare for when you come in and try to lead a business.”

Caldwell served from 2002-2007 in Germany with deployments to both Iraq and Kosovo. But he’s also spent some time on Wall Street. Caldwell worked in financial services at Goldman Sachs as a vice president and was a managing director at Virtu Management.

One of the biggest concerns for Caldwell in his first year at Sunrise Sports and Entertainment is building attendance. “It all starts with season tickets and getting more fans interested in the team and filling the building. Tickets drive everything. It excites our players … It’s all about getting out in the community, spreading the brand and getting people in the seats.” The Florida Panthers ranked 24 in the league for attendance for the 2015-2016 season with an average of 15,384 fans per game. While there’s room for improvement, it’s significantly better than the previous season, when the team ranked last in the league with an average attendance of 11,265.

In terms of generating a larger fan base, Caldwell says it starts at the junior hockey level. “We have a practice facility where we have a junior Panthers team. We’re building a rink alliance with five other rinks in South Florida that all have travel teams, because we think if we can get in with the youngest generation and teach them the game of hockey, not only does that create a hockey fan but presumably their parents and siblings [will become fans] as well.”

And for all the skeptics out there, Caldwell says the team is “here to stay in South Florida.” The team’s owners, he says, “have signed top, young talent to long-term deals. Right now we have 10 players on the hockey team that have five or more years on their contracts. They’re proving it’s a great product.”

[alexischristoforous-blog]

My "hero" pilot is also a pro financial planner

I was nestled into my seat on the plane, cocktail in hand, happily watching “Creed” when the pilot interrupted with an inflight announcement: “Folks, this is your captain speaking. We’re experiencing some engine trouble.”

What?! Did I just hear that right? Those are precisely the words you never want to hear, especially when cruising at an altitude of 38,000 feet. Three of my Yahoo Finance colleagues were on the same flight bound for Omaha, Nebraska, to cover this year’s Berkshire Hathaway annual shareholder meeting. Unfortunately, my coworkers were sitting nowhere near me. I wondered if they were also freaking out.

Then there was a loud grinding noise, the Boeing 737 shook, and a female passenger let out a blood-curdling scream. The man to my left started praying.

In a calm and steady voice, the pilot announced that our flight was going to make an emergency landing in Cleveland. Then, he warned that we would be landing at a higher speed than normal because of the engine trouble. I cinched my seat belt, clung to my armrests, closed my eyes tight and began to pray silently.

In a matter of minutes, we landed without a hitch at Cleveland Hopkins International Airport, and the scariest plane ride of my life was over. In a few hours, my colleagues and I were were on another plane bound for Omaha.

We later learned that Glenn Nevola, the hero pilot who safely landed our plane in Cleveland, is also a financial planner and the founder of Flight Line Financial. His eight-year-old, New Jersey–based investment advisor firm specializes in financial planning for airline pilots.

“There was a real need for pilots to have post-retirement wealth management,” Nevola tells me in the video above, citing the 65-year-old mandatory retirement age for commercial pilots. His business has since expanded to also help younger pilots navigate their future wealth management.

Nevola, who has been a commercial pilot for 30 years, believes he’s uniquely suited to service this niche market. He says a bond among pilots plays a major role.

“By nature of what we do,” Nevola says, “we trust each other every time we get on an airplane together, so as one pilot to another, it’s a natural bridge to trust that person with your finances.”

But it’s not just blind trust. Nevola has the street cred to back up his finance resume. Before founding Flight Line Financial, he worked as a licensed financial advisor for a team at Morgan Stanley that managed $1.5 billion in assets.

At 54, Nevola plans to continue to make his living in two of the most highly regulated industries in the world—flying and finance.

[lawrencelewitinn-blog]

Why Alan Greenspan stopped being a jazz musician

What makes a great person great? That’s a question Bernie Swain, founder of the Washington Speakers Bureau, sought to answer.

Swain, who represented Ronald Reagan and Margaret Thatcher in the years after they left office, has interviewed nearly three dozen people at the top of their fields — including Madeleine Albright, Condoleezza Rice and Tony Blair. He compiled their stories into a book, “What made me who I am.”

He spoke to Yahoo Finance’s markets correspondent Nicole Sinclair about what he learned.

Yahoo Finance: What inspired you to write this book?

Bernie Swain: “Back in the mid-1980s, I represented Alex Haley, who wrote ‘Roots.’ And Alex used to come in my office and spend hours just sitting and obviously talked about family all the time. And he used to repeat a phrase to me, ‘When an old person dies, it’s like a library burning.’ And what he meant was that all our experiences in life, the turning points in our lives, are like the pages in a book. And he said, ‘Take a look around you to look at the people that you’re representing and understand what made them who they are.’ So I kind of sat on the idea. He persisted and after about 10 years, I wrote the book.”

Yahoo Finance: And a fascinating subject that happened to you as well, right?

Swain: “It did. I was two months away from my dream job. I had a 15-year career in athletics and I was going to be the athletic director of a major university. My wife read an article in Fortune magazine where the largest speakers’ bureau in the world walked into the Ford White House to pick up Ford, Kissinger and Haig. And in the article, Henry Kissinger says, ‘You know, I don’t like your 33% commission rate. Why don’t I sign with one of your competitors?’ Harry Walker says, “I don’t have any competitors.’

My wife knew I was frustrated with university life and the bureaucracy of it. And she says, ‘Well, they don’t have any competitors. Why don’t we do that?’ And so we put a second mortgage on our home. We now had $55,000 in mortgages on a $60,000 house and we rented a closet with Chuck Hagel who later became Secretary of Defense. And for a year we sat in that closet, writing letters to people, trying to call people.

Yahoo Finance: Let’s start off with Alan Greenspan. He was going to be a jazz musician. What made him change? What insight did he give you?

Swain: “Very interesting. One of the things I learned about this was that passion is often much more important than talent for successful people. And he used to play in a jazz band. In fact, he was in his 20s still playing in a jazz band where one of his jazz musician mates was Stan Getz; he felt that he could never be as good as Stan was. And ironically he used to keep the books for the band. So he figured that, ‘Well, if I can be as good as Stan, then maybe I can do something else’. And that was the only thing he was doing was keeping the books for the band and that’s what started him on his career.”

Yahoo Finance: What about former Labor Secretary Robert Reich? He had an interesting experience. He, of course, went to Yale Law School with his future boss, Bill Clinton and with Hillary Rodham Clinton. What was his story?

Swain: “Well he’s 4’ 11” so he was teased and bullied from the time he was in preschool. And so one of the mechanisms he used was that he would find an older boy who could walk with him and protect him. And he found that when the older boys walked with him that the bullies didn’t pick on him. One of the people that protected him was Mickey Schwerner.

And he lost track of Mickey over the years. Mickey wanted to be a veterinarian, ended up [going into] social justice and during the civil rights [movement] in the South, what he did was go down South to protest and was killed by the sheriff’s department along with two other people. Upon learning of the death of Mickey Schwerner, [Reich] totally changed his life. He wasn’t interested in politics and he suddenly became interested. He figured that if Mickey tried to protect him, he wanted to spend his life trying to protect other people.”

Yahoo Finance: One person who isn’t in business or economics is the great football coach Lou Holtz. How did he get made?

Swain: “I always thought, imagine how amazing it would be if you had a CEO who took six companies that were all not profitable and by the second year you made them profitable. And not only made profitable, but you gave them a big name. And that’s what Lou Holtz has done. He took six failing teams over his career made them all successful. They’re all winning records by the second year. And he took them to a bowl game by the second year. And all of that was based on a theory of how to treat people correctly. And we’re going to do the right thing in life. And that’s been his philosophy. And all the kids that have played for him live in the same philosophy: ‘Is this the right thing to do?’”

Yahoo Finance: From the experiences and the stories, is there anything that stands out or a theme that runs through?

Swain: “The interesting thing that Alex Haley made me pay attention to was that the people in the book were not successful because the way I thought they were successful and I think the way a lot of people think they’re successful.

“They weren’t given opportunities that are not available to the rest of us. Most of these people that are in the book came from humble and modest beginnings. And what they learn from is they learn from the influences of the defining moments, the turning points in their lives, the forks in the road. And that’s what gave them the wisdom and the strength and made them successful in accomplishing things in life. “

[erin-fuchs-blog]

The big question at the heart of the insider trading case heading to the Supreme Court this week

On Wednesday the Supreme Court will hear an insider trading case for the first time in two decades, and it will once again have to weigh the issue without a definition of the practice from Congress.

The case involves a grocery wholesaler named Bassam Salman who’s accused of trading on tips from a brother-in-law who worked for Citigroup. Prosecutors accused Salman of making nearly $1 million from trading on information involving Citigroup mergers, and he was sentenced to three years in prison for conspiracy and fraud.

The question the Supreme Court has to decide is this: In order to prove insider trading, is it necessary to show that a tipper like the brother-in-law got cash or something valuable in exchange for the tip — or is it enough to show the tipper and tippee were close family members?

There is another question that the case itself raises, though: Why doesn’t the United States have a specific law on the books to regulate insider trading?

“What there ought to be is a statute on insider trading,” University of Michigan Law School professor Adam Pritchard told Yahoo Finance. “The SEC has resisted that.”  The agency has pushed back against an insider-trading statute, in part, because “murky” rules give it more leverage during settlement negotiations, Pritchard contends.

Congress ‘lurking in the background’

In the absence of a specific statute, the SEC can file civil cases involving insider trading under anti-fraud provisions of federal securities laws and the Justice Department can file criminal cases using the same laws — since insider trading can be either a civil or a criminal action. The SEC paved the way for many insider trading cases in 1961, when it ruled that two key fraud provisions of the Securities and Exchange Act of 1934 applied to corporate “outsiders” like Salman.

Following the 1961 ruling by the SEC, lawmakers have introduced laws to ban insider trading but none have passed. Meanwhile, the European Union has a “very clear and a very broad” law banning insider trading, Peter J. Henning, a professor of law at Wayne State University, told Yahoo Finance.

Congress’s own inaction on the issue is “lurking in the background” of the insider trading case the Supreme Court will hear this week, Georgetown Law professor Donald Langevoort said.

“Everybody has said it is something of an embarrassment that in the US, which 50 years ago invented the law of insider trading,” Langevoort said, “we’re now essentially the only country in the world that doesn’t regulate it by statute.”

Without a specific law on the books to regulate insider trading, it’s been largely up to the courts to define what constitutes insider trading, as it must do in the Salman case. The Supreme Court took its first modern-day stab at defining illegal insider trading in a 1983 case called Dirks v. SEC, ruling that insider trading could involve quid pro quo or an insider making “a gift of confidential information to a trading relative or friend.”

More than 30 years after Dirks, the US appeals court in New York shook up the world of insider trading when it ruled that friendship alone between a tipper and tippee wasn’t enough to establish fraud. Some lawyers contended that the New York case, US v. Newman, actually changed the law though others argue the case is consistent with Supreme Court precedent.

In light of the disagreement about Supreme Court case law, one might argue that Congress should step in once and for all to ban — and define — insider trading. But that doesn’t seem likely.

‘A political nightmare’

While the SEC may have resisted an insider trading statute, Wall Street would also likely push back against a law specifically banning the practice. That would make it difficult to pass an insider trading ban, especially in light of the Supreme Court’s 2010 Citizens United decision, which makes it easier for corporations to spend money on political campaigns, Langevoort, the Georgetown professor pointed out.

“It’s a political nightmare, in a post-Citizens United world, especially, where money talks as loudly as it talks, the hedge funds and Wall Street are going to be up there looking out for their own interests,” Langevoort noted. “And their own interests are not in aggressive insider trading enforcement.”

That said, he noted, if the Supreme Court were to issue an opinion that narrowed the definition of insider trading — in favor of Salman, the grocery wholesaler — it could spur Congress to act.

When the Supreme Court hears the Salman case on Wednesday, and when it issues its decision later in the term, it will do so without one of the justices who decided to take it up in the first place: Antonin Scalia.

The late justice was particularly keen on hearing an insider trading case, and he may have used the Salman case as an opportunity to make it harder for prosecutors to bring those charges.

Erin Fuchs is deputy managing editor at Yahoo Finance.

[danielphowley]

Here's why Microsoft is the 'new' cool kid on the block

On Monday, Sept. 26, Yahoo Finance will live stream Microsoft CEO Satya Nadella’s keynote at the Microsoft Ignite Conference, at 4 p.m. EST.

Microsoft’s Satya Nadella has been the CEO of Microsoft for a little more than two years, having taken over for former CEO Steve Ballmer in February 2014. In that time, the company, which was quickly sliding into irrelevancy with consumers, seems to have completely reinvented its image.

What was once a colossus teetering on the brink is now, incredibly, the cool kid in town. A lot of that change has to do with Nadella taking the helm, sure. But much of it comes from the products Microsoft now offers.

A new rallying cry: “Mobile first, Cloud first!”

Since he took over, Nadella, who has been with Microsoft since 1992 and most recently headed up its cloud division, has repeatedly said Microsoft needs to be a “mobile-first, cloud-first,” company. That sounds rather odd for a tech giant that built its empire on sales of its Windows operating system and Office productivity software. But that’s where Nadella believes the company needs to go to survive.

It’s even more odd for a tech company that has failed so spectacularly when it comes to its Windows smartphones. The company’s handset division saw a massive restructuring and laid off thousands of employees following its acquisition of smartphone maker Nokia’s phone business for $7.2 billion in 2014.

But when Nadella speaks of mobile first, he isn’t talking about a second coming of Windows Phone. Instead, he means he wants the company’s software to work across mobile platforms and devices. That, naturally, leads to the second half of Nadella’s rallying cry: making the company cloud first. The cloud, in its broadest sense, is a series of computers attached to each other that allow you to run high-end software and store your files online.

As analyst Al Gillen, group vice president of IDC’s software development and open source group, explains, one of the most important steps Nadella took after becoming CEO was to drag Microsoft into the age of open source.

“Microsoft has gotten in sync with where the industry is going,” Gillen said. “Satya immediately made clear that the old norms weren’t going to work any more. They needed to embrace technologies that the rest of the world saw as important.”

That included working with the popular open-source Linux operating system, which many companies have used to build their web servers. Microsoft’s former CEO Steve Ballmer famously referred to Linux as a cancer.

“There are people inside Microsoft that probably saw it as a hard transition to make,” Gillen explained. “There were people there that spent most of their lives fighting against Linux and Apple. And the idea of taking their products and having to work with those companies was essentially unheard of up until Satya Nadella took over the role.”

Microsoft has even put its cash cow Office on iOS and Android devices and developed new apps for Apple’s iPhone.

But working with other companies and types of software isn’t just a way to make Microsoft seem cool and interesting. It’s an important way to bring in younger developers who may only have experience working with Linux, as well as ensuring that its products will work on the highest possible number of systems.

More importantly, however, is that Microsoft understands that if it is to survive the next big technological shift, it has to move to the cloud. As it stands now, the future of tech is pointed toward cloud computing. That’s because, in its ubiquitousness, the cloud provides a means for consumers and companies to access their data at any time on any device. You need look no further than the success of Amazon’s popular Amazon Web Services (AWS), which has helped push the company’s stock price to all time highs in recent days.

Microsoft, though, is putting up quite a fight with its Azure cloud computing services. According to Microsoft’s own numbers, 85% of Fortune 500 companies use Microsoft’s cloud services and it adds 120,000 new Azure subscriptions per month.

Growing beyond just the cloud: Windows, Office, and 2 big acquisitions

Outside of the cloud, Microsoft has helped to rehabilitate its image among consumers with the release of its new Windows 10 operating system. The follow-up to the widely disliked Windows 8, Windows 10 was offered as a free upgrade to Windows 7 and Windows 8 users for the first year of its availability.

The company also now offers its Office software with a yearly subscription in addition to the standard one-time purchase price. The benefit to consumers in buying the subscription version of Office is that their version of the software is never outdated. The benefit to Microsoft: a continuous revenue stream.

Then there are the two enormous acquisitions Microsoft has made under Nadella’s guidance: LinkedIn and Mojang, maker of “Minecraft.”

Microsoft announced its intent to acquire LinkedIn in June at a staggering price of $26.2 billion. The idea behind the purchase was to marry the “world’s leading professional cloud” with the “world’s leading professional network.”

The purchase of Mojang for $2.5 billion, meanwhile, gave Microsoft the ability to get its name into the heads of children who may have only played games on their parents’ iPads or iPhones.

Of course, any mention of Microsoft’s renewed status is incomplete without discussing the company’s hardware offerings: the Surface Pro 4 and Surface Book. Both devices offer sleek, industrial designs (similar to Apple’s trademark styling) and exceptional performance.

And then there is HoloLens. The virtual-reality headset allows users to interact with digital elements ranging from standard windowed apps like Microsoft’s Edge browser all the way up to digital medical school cadavers projected into the real world. HoloLens is the kind of big idea that can genuinely excite not just a company’s existing fan base, but consumers as a whole.

Microsoft doesn’t just see HoloLens as some kind of backroom pet project that never sees the light of day, either. The company is actively pitching the product as the future of personal computing, the next step in the evolving consumer technology revolution that has run from graphical user interfaces through the internet age and to the current mobile world.

Microsoft still has stiff competition in the tech world

But Microsoft doesn’t exist in a vacuum. The tech industry is in a constant state of flux and while the company’s fortunes appear to be on the upswing in terms of public perception and the cloud, a single misstep could reverse all of the goodwill the 41-year-old company has garnered in the past few years.

Microsoft also still has to contend with the fact that its presence in the mobile space is virtually nonexistent next to the likes of Apple and Google. And while HoloLens is an ambitious idea, both Apple and Google are most assuredly working on equally intriguing projects of their own. There’s also the fact that Microsoft is still without a significant contribution to the growing smart home industry.

For now, though, Microsoft is the cool kid again, now it’s going to have to work to keep it that way.

More from Dan:

Google’s Allo funnels the limitless power of the internet into a simple messaging app

The best smartphones you can buy right now

Your jet-black iPhone 7 might not look new for long

The unplanned reason the iPhone 7 could be a hit

Samsung’s Gear S3 smartwatch lets you ditch your phone in style

Email Daniel at dhowley@yahoo-inc.com; follow him on Twitter at @DanielHowley.

[its-jen-rogers-blog]

Apptio CEO: Now the right time for IPO

It’s been a slow year for initial public offerings. In fact, it has been the weakest on record since the financial crisis of 2008. But the sickly IPO market is finally showing signs of life. This week looks to be the busiest week for new issues all year, with September on track to be the most active month for all of 2016, according to Dealogic.

Among the new issues investors seemed eager to snap up in the last few days: Apptio. The tech company, which makes cloud software to help manage IT, surged more than 40% on its first day of trading. The Bellevue, Washington–based company sold 6 million shares for $16 a piece, above the marketed range of $13 to $15. Overall, the company raised $96 million.

Co-founder and CEO, Sunny Gupta, says that despite the trend of staying private longer, now was the right time for his company to go public. That said, he isn’t sure how many other tech companies will follow. He noted from Apptio’s roadshow that he learned the “bar is high” for IPOs right now. Apptio has not posted a profit yet, but its revenues climbed over 20% last year. The stock is listed on the Nasdaq, and its ticker is APTI.

[j-underhill-blog]

Wells Fargo's high-pressure sales culture starts at the top

After reports of fraud, identity theft and forgery, Wells Fargo has promised to clean up its act. But based on recent statements by the CEO, the bank’s troubles are just beginning.

Over the span of five years, Wells Fargo fired 5,300 employees for opening as many as 2 million fake accounts. Roughly 85,000 of those accounts incurred $2 million in fees.

In many cases, customers were unaware of the accounts and the accompanying fees. Those accounts became delinquent, and customers were forced to fight with debt collectors over the fraudulent charges. Their credit reports were damaged, which affects everything from job applications to mortgages.

Wells Fargo’s bad apples

Wells Fargo describes the problem as the actions of just a few low level employees– not a systemic issue, and not something that represents company culture. The CFO, John Shrewsberry, explained,

These bad practices were not a revenue-generating activity. It was really more at the lower end of the performance scale, where people apparently were making bad choices to hang on to their job.

The CEO, John Stumpf, agreed, telling The Wall Street Journal, “The 1% that did it wrong, who we fired, terminated, in no way reflects our culture,” and that “[t]here was no incentive to do bad things.”

So why did 5,000 people do bad things with “no incentive”?

Eight rhymes with great

According to a complaint filed last year, employees were often required to work unpaid overtime to meet unreachable goals:

Wells Fargo has strict quotas regulating the number of daily “solutions” that its bankers must reach; these “solutions” include the opening of all new banking and credit card accounts. Managers constantly hound, berate, demean and threaten employees to meet these unreachable quotas.

Bankers weren’t expected to just open one account for a customer. They had to open multiple accounts, known as cross-selling. If a customer has a checking account, a banker would be expected to sell them a mortgage, sell them wealth-management products, or credit card accounts. Management set a goal of eight products per customer. Every single person who walked into a Wells Fargo branch needed to have eight accounts.

Why eight? Stumpf addressed this question in the company’s 2010 annual report:

I’m often asked why we set a cross-sell goal of eight. The answer is, it rhymed with “great.” Perhaps our new cheer should be: “Let’s go again, for ten!”

That’s a goal not based on branch traffic or an analysis of customer demand, but based on wordplay.

A rock and a hard place

Over the past five years, there were numerous signs that Wells Fargo’s strict sales quotas created problems, from customer complaints to labor lawsuits. These suits alleged the company forced employees to work beyond their typical schedule without pay– in some cases to meet sales goals. Top reviews on Glassdoor.com warned of the perverse incentives, while dozens of Youtube videos spoofed the bank’s aggressive sales environment.

One employee, Bill Bado, decided to alert the company’s ethics department of the problems in 2013. Shortly after, he was fired, according to a report by CNN Money.

CEO John Stumpf recently admitted to being aware of the problems in 2013, when the LA Times published a scathing piece, which described a micro-managed, high-pressure sales culture:

One former branch manager… discover[ed] that employees had talked a homeless woman into opening six checking and savings accounts with fees totaling $39 a month.

“I’m not aware of any overbearing sales culture,” Chief Financial Officer Timothy Sloan said in an interview.

Despite the denials, Wells Fargo held multi-day ethics seminars in 2014 to try to stop employees from making fake accounts. But, according to The Wall Street Journal, the message didn’t quite get through to one manager, who after the meeting “urged her employees to ignore the bosses and get sales up at any cost.”

The practices continued because the impossible quotas weren’t changed.

Denial at the top

Wells Fargo did announce that it plans to eliminate the aggressive sales goals by next year. But as far as recognizing the pressures placed on employees, that fell short.

When Oregon Senator Jeff Merkley asked if Wells Fargo created a pressure-cooker sales culture that put bankers in an difficult situation, CEO John Stumpf responded, “I do not believe that.”

While Stumpf has repeatedly said that he holds himself accountable, he continues to deny that he instilled a high-pressure environment that fostered the problems.

Change needs to be driven by recognition and true accountability at the top. Until that happens, it’s going to be business as usual.

[yahoofinancestaff-blog]

Susan G. Komen Founder: Competition is healthy for cancer research

“Competition is healthy. The issue is how to collaborate,” Nancy Brinker, founder of breast cancer organization Susan G. Komen, told Yahoo Finance when discussing cancer research at the Concordia Summit in New York City. “People are going to have to figure out a way to secure both risk/reward for developing therapeutics and sharing data.”

Brinker is determined to educate women all over the world about the risk and danger of breast cancer, and how you can be screened, treated and cured of the disease. Brinker, who co-chaired a panel at the Summit, brought together key players in cancer research to discuss ways to elevate the global priority of the fight against cancer.

By 2025, 19.3 million new cancer cases are expected to be diagnosed each year, according to the Centers for Disease Control and Prevention. As of 2012, which is the latest year for which information is available, there were 14.1 million new cancer cases diagnosed.

“We need better diagnostics,” said Brinker. “By being able to detect these cancers earlier and treat them earlier, we’ll have much less cost in the system. It’s not only cost effective, it’s the right thing to do.”

Susan G. Komen, which aims to reduce current breast cancer deaths by 50% in the US over the next decade, announced this week nearly $33 million in new research grants for 2016. The grants were given to projects in 23 states and seven countries to help accelerate the understanding of key areas in breast cancer research.

[jared-blikre-blog]

Buy of the year: Japanese stocks, says analyst

Japanese pagoda

Japanese stocks are poised to rocket higher and test levels not seen since the 1980s, according to Yves Lamoureux, president and chief behavioral strategist of macroeconomic research firm Lamoureux & Co.

From a technical perspective, Lamoureux notes that the Nikkei 225 Index (^N225) has showed strength by going sideways most of 2016 despite a significantly stronger yen, which ought to have weighed heavily on Japanese stocks.

Lamoureux correctly calls many long-term price swings in various markets and rarely shares his proprietary work. However, he has provided the below chart exclusively to Yahoo Finance, which shows the current “buy” signal in the Nikkei.

Nikkei 225 – Lamoureux and Co. behavioral model

“By May 2017, we target the swing up back to 20,000. But this is part of a much larger pattern that will take us to 30,000. You will see how the same signal launched the Nikkei in 2012,” he says.

From a fundamental perspective, Lamoureux argues that from a societal perspective, Japanese are warming up to immigration in an effort to reverse demographics. In addition, people are underestimating Japan and the power of consensus. “Slow moving at first, the Japanese can act fast once they understand the merits. We look for [BOJ Governor Haruhiko] Kuroda to unveil a shock-and-awe later this month,” he says.

“Ultimately the BOJ and pensions will have bought all available stocks. The BOJ has instructed pension funds to get rid of bonds and buy stocks. The BOJ is buying everything on sight through the purchase of ETFs. [It already owns more than 50% of all Japanese ETFs.] The ultimate unwritten goal is to float up values of the portfolios, as bonds will make the task of creating returns near impossible. Over the next five decades pension funds need to build wealth.”

[seana-smith-blog]

Labor Secretary: Higher minimum wage and immigration reform will boost job growth

The US added 156,000 jobs in September, bringing the total number of workers added to the labor force to 3 million over the past year, the biggest gain since 2000. That, coupled with the fact that September was the 72nd consecutive month of rising nonfarm payrolls, is a sign of overall improvement in the job market.

“This report shows steady jobs growth and steady wage growth,” US Department of Labor Secretary Thomas Perez told Yahoo Finance’s Seana Smith in the video above. “We’ve now had 72 months in a row of jobs growth to the tune of 14.4 million jobs. The real wage growth we’re seeing in this business cycle is the best of any business cycle since the 1970s.”

Average hourly wages rose 6 cents to an annualized rate of 2.6% as the average workweek inched up one-tenth to 34.4 hours.

While there are a number of indicators moving in the right direction, Perez is quick to point out that there’s still “more work to do.”

“I still meet too many people who are struggling. We still have way too many people who are working a 50-hour job and getting their food at the food pantry, and you have to win the geographic lottery to have a decent minimum wage in this country,” said Perez. “If we had infrastructure investments at scale, if we had a higher minimum wage, if we passed immigration reform, our unemployment rate would be even lower,” said Perez.

The jobless rate rose one-tenth of a percent to 5.0% in September, its highest level in four months. It was projected to hold at 4.9%, close to its lowest level since 2007.

In terms of what needs to happen in order to get more Americans back to work, Perez says it’s important to “invest in skills” and “match people’s skills with in-demand jobs.”

“There are 5.9 million job openings right now, including about 10% in the IT sector, so there’s real opportunity out there,” said Perez. “We’re Match.com here at the Department of Labor. We match job seekers who want to punch their tickets to the middle class with businesses who want to grow.”

[alexischristoforous-blog]

How world leaders are "sleepwalking" through the refugee crisis

  “Our leaders are sleepwalking,” that’s how Salil Shetty, Secretary General of Amnesty International, describes the reaction of world leaders to the refugee crisis. 

More than 65 million people have been driven from their homes—which is more than any time since World War II.  Among them are more than 21 million refugees from three countries ravaged by war —Syria, Afghanistan and Somalia.

FindTheData | Graphiq

Shetty tells Yahoo Finance that September’s United Nations “Summit for Refugees and Migrants” ended in “abject failure” because leaders “missed an opportunity to make specific commitments to help end the suffering of refugees across the world.”

Days later, US president Barack Obama’s “Leaders’ Summit on Refugees” in New York did only slightly better, according to Shetty, but still fell far short of what is needed to address the global refugee crisis.

States attending Obama’s summit committed to increase funding by $4.5 billion. Fifty-one US companies also pledged to donate, invest, or raise more than $650 million in aid.

That total includes a $500 million donation from investor and philanthropist George Soros. Shetty points out that Soros’ individual donation is $200 million more than the country of China has donated to the refugee crisis.

“We can’t underestimate the importance of money to aid the crisis,” Shetty said, “but wealthy countries can’t just commit money and walk away.”

According to New World Health, China is the second wealthiest country in the world, when comparing total individual wealth. The United States ranks first, while Japan is third.

Amnesty International is asking these and other rich countries to host more refugees.

Currently, more than half of the 21 million refugees are being hosted by smaller, neighboring countries, including Lebanon, Turkey and Jordan.

According to the German newspaper, Die Welt, Germany took in about a million refugees in 2015. That’s more than the US has taken in—in the past decade.

Shetty says the popular belief that people don’t want refugees in their countries is not necessarily true. A recent Amnesty International survey of 27,000 people in 27 countries found that 4 in 5 people would welcome refugees into their countries and even consider taking them into their homes. Shetty says the results show how governments that are turning their backs on refugees are “badly out of touch with reality.”

[pras-s]

Ferrari's newest car was inspired by these two classics

When the church bells ring in Maranello, Italy, on Sunday – it’s not always to remind the faithful for prayer. Since 1928, in the land of Ferrari the church bells ring for victory on the Formula 1 track, too.

But times have been changing, and the most famous team in Formula 1 has seen muted success as of late. Nevertheless, the company has been winning where it counts in another area – the bottom line. The Prancing Horse brand continues selling thousands of high-priced machines.

Ferrari is public now, spun off from parent Fiat Chrysler, and Ferrari must meet the demands for its passionate customers and the investing public. That’s why the setting of Pebble Beach, during Monterey Car Week from August 15-21, was the perfect time for Ferrari to make both parties happy by showing off a new car.

Home away from home

“This is one of the most important automotive events in the world this is for car enthusiasts. It’s all about beauty, it’s all about performance, it’s all about classic cars, and Ferrari is everything about cars,” says Enrico Galliera, SVP of Sales and Marketing at Ferrari. “Here we have some of our best customers, our best collectors, and we’re here to support them at this fantastic event.”

At Casa Ferrari, Ferrari’s home away from home in Carmel, California, fans of Ferrari can meet for an espresso, display their treasured Ferrari automobiles, or just buy a t-shirt. It was at Casa Ferrari that the automaker debuted the GTC4Lusso in North America for the first time. The GTC4Lusso is an update to the groundbreaking FF, a hatchback, or shooting brake as they call it.

The ‘4’ in its name signifies all-wheel drive and all-wheel steering, which is represents the highest technology Ferrari has to offer. “This is a GT car, and the DNA of Ferrari is performance,” Galliera proclaims about the GTC4Lusso, adding that it also “takes inspiration from some cars from [Ferrari’s history].”

And just behind us paying homage to the GT cars of the past, Ferrari had on display a vintage 330 GTC. This was Monterey Car Week after all, a celebration of both the past and present of the automotive world’s most celebrated carmakers.

“The 330 GTC represents the heart and soul of the company, which is not only creating high performance sports cars, but high performance cars you can use everyday,” Galliera says. It was also one of Enzo Ferrari’s favorites.

[samro]

Don't be fooled by the S&P 500's peculiar pattern of earnings surprises

Second-quarter earnings season is coming to a close and, for the most part, earnings for S&P 500 (^GSPC) companies during the three months ending in July were better than expected.

“474 companies (96.8% of the S&P 500’s market cap) have reported,” RBC’s Jonathan Golub observed. “Earnings are beating by 3.8% while revenues are surprising by 0.1%.”

In the stock market, the “surprise” represents the difference between expected earnings (as forecast by analysts and guided by managements) and actual earnings (as reported by the companies).

Earnings tend to surprise to the upside. (Image: RBC)

However, “surprise” is a bit of a misnomer. Take a look at the chart of past surprises. Do you see the pattern? That’s right: in at least the past 12 quarters, the average earnings surprise has always been positive. Always.

There are a few theories that attempt to explain this. The shadiest theory suggests managers are using accounting tricks to help bolster the reported bottom line.

The most popular theory is that managements and investor relations reps go to great, yet subtle lengths to lower expectations. This way, companies are less likely to disappoint investors and traders when they reveal actual results. This is evident in the chart below, which shows how earnings estimates were revised ahead of the announcement of actual earnings. As you can see, on average, revisions are negative.

Estimates for earnings have been revised down in each of the past 12 quarters. (Image: RBC)

They’re managing expectations. And why wouldn’t they? The last thing they want to do is talk up the company, inflate the stock price, and then actually fall short of expectations, which often ends in tears as stock prices fall and investors lose faith in management.

Okay, so companies beat expectations by an average of 3.8%. Is that something that merits a celebration? Not really.

“2Q16 results point to declines in revenue, earnings, and EPS of -1.0%, -3.9%, and -1.7%, respectively,” Golub observed. That’s right. Everything was actually negative.

All these surprises tell you is that the numbers just weren’t as negative as expected.

– Sam Ro is managing editor at Yahoo Finance. Read more:

David Rosenberg nails the stock market in a perfect sentence

The stock market is making no sense for a lot of investors

How a bad story can cripple the economy

The gloomy profits narrative underlying the stock market just got worse

Forecasting 2017 earnings has become Wall Street’s most controversial task

[danielphowley]

With new Duo app, Google wants to make video chatting more human

I almost never use video calling apps unless it’s for a work meeting or to talk to a friend in another state. Beyond that, I generally feel like getting them to work properly is more work and worry than it’s worth. But Google wants to change that kind of thinking with its new Duo video-calling app.

Available Tuesday for both Android and iOS, Duo is Google’s attempt at making video calling apps more personal. To accomplish that, the company specifically designed the app for one-to-one mobile calling. Yep, there’s no desktop calling with Duo. If you want to talk, you’ve got to be on your phone.

Part of what makes Duo unique among video calling apps, at least as Google tells it, is its simplicity. When you’re in a call, all you see is an end call button, a button to mute yourself and a button to switch from your phone’s front-facing camera to the rear camera.

Duo pulls in contacts from your phone

“The north star was to make the app super, super simple,” explained Google’s VP of communications products Nick Fox. “We stripped out all of the complexity, making it simple and making it just work.” 

Like Facebook’s super popular WhatsApp, Duo requires you to use your smartphone’s phone number to create an account. When you first install the app, you’ll receive a text message sent to the phone number with which you want to use the Duo.

From there, the app will scour your phone’s contact list for other users who’ve registered with the app and add them to your Duo contact list. If you want to talk to someone via Duo, but don’t have his or her number saved in your contact list, you can just enter their cell number and call.

The standout feature of Duo is Knock Knock, a kind of virtual peephole that lets you see who’s calling and what they’re doing before you pick up. As long as the person you’re calling has you saved as a contact, the first thing they’ll see before even answering your call is a live video of you. If they aren’t saved as your contact, you can’t see them.

Knock Knock lets you see a video of who’s calling

Oh, and it’s important to note that the person calling never sees your face until they pick up. So you don’t have to worry about someone sneaking a peak at you without your knowing.

“What’s neat about this,” Fox said, “is that the person that’s calling starts making faces and jumping up and down to get the receiver’s attention. And because they see this, the first moment of the call is a happy warm moment.”

It’s totally true. I called someone who also had Duo installed from my phone and lit up as soon as I saw their face; it was a genuinely happy moment. Of course, I’m sure you’ll get the occasional Knock Knock with someone on the other end looking particularly unhappy, but I guess that’s also part of making the app more human. If you don’t want to use Knock Knock, Duo gives you the option to turn the feature off entirely.

Google’s goal is to make Duo work on as many smartphones as possible on virtually any connection you have available, whether that’s the latest iPhone running on 4G LTE or a $50 phone on a 2G network.

To do that, Fox explained, the app has been designed to scale along with your connection. So if you’re on LTE, you’ll see crisp video and clear sound. When your connection quality drops, though, the video will slowly degrade until it eventually goes blank.

All the while, Fox said, the app’s audio will be maintained. That’s because Duo, despite being a video-calling app, prioritizes audio over video, since it’s easier to pass audio over a congested or unstable network.

So far, the app seems to work well over Wi-Fi and LTE connections. I haven’t had a chance to put it through the wringer on a slow connection, though. I’ve noticed a few video hiccups when establishing a connection over Wi-Fi, but beyond that, everything with the app seems to run smoothly. I was especially impressed with how well Duo managed to move seamlessly between LTE and Wi-Fi networks without any downtime.

Google also wisely chose to set Duo to pause your video feed when you navigate away from the app during a call, which is way better than having to stare at the person on the other end of the line fiddle with their phone as you sit there.

So if Duo is Google’s new consumer video chatting app, then where does that leave the company’s popular Hangouts app? Well, according to Fox, Google will continue to support Hangouts, albeit with a more enterprise-friendly focus. That makes sense as more and more companies, including Yahoo, rely on Hangouts for group video chatting.

Duo, and its upcoming instant message-based partner app Allo, is part of Google’s attempt to get in on the enormous messaging app market currently dominated by apps like the aforementioned WeChat, WhatsApp and Facebook Messenger. With more people joining such services, it makes sense for Google to jump in as well.

Duo is currently rolling out for Android, and iOS and should be available globally in the coming days.

More from Dan:

Here’s how to use New York’s new free Wi-Fi kiosks

How to follow the 2016 Olympics from your smartphone

Hackers have developed autonomous programs that’ll hunt down and fix your vulnerabilities

Car thieves are hacking and stealing Jeeps

Email Dan Howley at dhowley@yahoo-inc.com; follow him on Twitter at @DanielHowley.

[its-jen-rogers-blog]

Why Kaepernick’s brand may be stronger than ever

We are all talking about him. His jersey is number one on the NFL sales chart. And he kept a spot on the 49ers roster.

Three weeks ago, that wasn’t necessarily the case. When San Francisco 49ers quarterback Colin Kaepernick decided to sit for the national anthem back in August as a protest over what he sees as the country’s oppression of people of color, the conventional wisdom was that “Kap” had committed a cardinal sin in the world of sports. To make the most of their relatively short careers, model professional athletes in the era of big-business sports need to be more committed to capitalism than controversy.

For former NFL Pro Bowler and The NFL Today commentator Bart Scott that’s what makes Kaepernick impressive. “He’s not the starting quarterback anymore. He’s a backup… When you’re the backup, you want to be seen and not heard, so to speak. So he’s fighting for what he believes in, and that’s what makes him more impressive to me, that at this vulnerable state of his career he’s willing to stand up and fight for something.”

As Scott notes, that can sometimes be detrimental. “You can become blackballed, because you can become bad for business. So it can hurt your ability to earn.” As the saying goes, Republicans buy shoes too.

For Kaepernick, though, his stand has had the opposite effect on his brand. His jersey sales have shot up. He is donating proceeds from the boost in sales to charities focused on racial and social inequality. He has also committed $1 million from his salary to those causes. The 49ers organization has also pledged $1 million in donations, and other athletes are following his lead by kneeling during the anthem.

Scott compares Kaepernick to Muhammad Ali, who refused to fight in the Vietnam War. “It’s never a convenient time to stand up for what you believe is right. And he also put his money where his mouth is. Him donating $1 million out of his salary, or out of his bank account, speaks volumes, meaning that he’s serious, that he’s not just standing up with pompoms and cheering, but he’s actually actively trying to do something,” he said.

Of course, Kap’s ability to make a difference off the field is still strengthened by his play on it. The 49ers face the Rams on Monday.