WEBVTT - Peter Anderson on John Stumpf Congressional Testimony (Audio)

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<v Speaker 1>Broadcasting live to New York, Bloomberg eleventh to Washington, d C.

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<v Speaker 1>Got Gone. This is taking stock, coming up on taking stock.

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<v Speaker 1>We're gonna take stock of Wells Fargo. It has been

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<v Speaker 1>a bad month for Wells Fargo shareholders and for the bank,

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<v Speaker 1>the bank agreeing to pay in order to settle allegations

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<v Speaker 1>related to fraudulent accounts being opened, and also the appearance

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<v Speaker 1>before two sets of regulators in Washington of John Stump,

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<v Speaker 1>the company's chief executive. We're gonna have more on Wells Fargo.

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<v Speaker 1>Find out maybe Wells Fargo stock is on sale right now, though,

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<v Speaker 1>Let's go to Catherine Cowdy in the Bloomberg news room

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<v Speaker 1>for Bloomberg Business Flash. Thank you, Bam and Bloomberg. Taking

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<v Speaker 1>drop as Deutsche Bank tries to reach your investors about

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<v Speaker 1>his financial health. On the economic front, to reports showed

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<v Speaker 1>that consumer spending installed in August, Bloomberg's been a del

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<v Speaker 1>judace has the details. The government data are consistent with

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<v Speaker 1>projections at household purchases will provide a smaller but respectable

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<v Speaker 1>contribution to GDP. The Commerce Department reports consumers spending was

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<v Speaker 1>unchanged last month after four months of steady gains. Adjusted

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<v Speaker 1>for inflation, spending drop for the first time since January.

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<v Speaker 1>Income growth also slowed, rising point two. The poors could

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<v Speaker 1>be short lived. The University of Michigan Consumer Sentiment Index

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<v Speaker 1>rose in September, the first game in four months. At

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<v Speaker 1>the Bloomberg first word desc company del judais Bloomberg Radio

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<v Speaker 1>we take the markets every fifteen minute throughout the trading

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<v Speaker 1>day and Bloomberg Radio down. Industrial averages up two hundred

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<v Speaker 1>nine points one point one percent, trading at eighteen thousand,

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<v Speaker 1>three hundred fifty two. SMP five funded up twenty three

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<v Speaker 1>points one point one percent seventy four. The nasdact is

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<v Speaker 1>higher by fifty four points, a gain of one percent.

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<v Speaker 1>Is trading at fifty three twenty three less. Texas intermedi

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<v Speaker 1>At crude oil up twenty seven cents of barrel, six

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<v Speaker 1>tents of a percent to forty eight ten sparckled down

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<v Speaker 1>five dollars forty cents an ounced to thirteen sixty ten

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<v Speaker 1>year Treasury down ten thirty seconds with the yield of

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<v Speaker 1>one point five nine percent. Among today's top business stories,

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<v Speaker 1>IBM wants to use artificial intelligence technology to automate parts

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<v Speaker 1>of the finance industry's regulatory compliance effort. And now let's

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<v Speaker 1>get an update of some of the other stories we're

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<v Speaker 1>following on Bloomberg Radio today. Thank you, Catherine from the

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<v Speaker 1>Bloomberg Newsroom. I'm Jill Schneider. This news update is brought

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<v Speaker 1>Draw one at your local Jeep dealer Today. Officials say

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<v Speaker 1>the investigation into the deadly train crash at the Hoboken

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<v Speaker 1>station could take at least seven to ten days. It

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<v Speaker 1>was a tough ride to work for some commuters after

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<v Speaker 1>yesterday's crash. This Hoboken commuter is worried about the future

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<v Speaker 1>I don't see for months. The New Jersey Transit portion

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<v Speaker 1>of the Hoboken station remained closed today. A museum to

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<v Speaker 1>honor Navy seals is being planned in New York. Officials

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<v Speaker 1>say the museum, which could open in two thousand eighteen

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<v Speaker 1>in Saville, will be named for Lieutenant Michael P. Murphy,

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<v Speaker 1>The Medal of Honor recipient, died along with eighteen others

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<v Speaker 1>in a gun battle in Afghanistan in June two thousand five.

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<v Speaker 1>A mistake during Monday Nights presidential debate gave one Virginia

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<v Speaker 1>woman a big headache. Bloomberg's Michael Barr explains, Thank goodness,

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<v Speaker 1>this woman has unlimited data on her smartphone. A Virginia

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<v Speaker 1>woman says she received more than thirteen thousand text messages

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<v Speaker 1>and six calls after c Span accidentally put her number

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<v Speaker 1>on TV during the residential debate. Ce Spend put Trip

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<v Speaker 1>Diaz's number on TV, asking viewers to call and text

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<v Speaker 1>the comments on the candidates debate though most watched presidential

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<v Speaker 1>debate in history, so you, Spends spokesman Howard Mortman says

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<v Speaker 1>they got it wrong, and I've apologized to the stafford

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<v Speaker 1>Woman Michael Barr. Bloomberg Radio Global News twenty four hours

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<v Speaker 1>a day, powered by more than twenty journalists and analysts

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<v Speaker 1>in more than one hundred twenty countries. I'm Joel Schneider,

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<v Speaker 1>this is Bloomberg. Katherine, thank you, and now let's get

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<v Speaker 1>a quick update of the benchmarks. DL and DUST for

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<v Speaker 1>laverage up two hundred nine points at eighteen thousand, three

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<v Speaker 1>hundred fifty three. Smp F I founded up twenty three

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<v Speaker 1>point nwas Jack Hier by fifty four points at fifty

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<v Speaker 1>three And that's a Bloomberg business flash. You're listening to

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<v Speaker 1>taking stock with Kathleen and Pim Fox on Bloomberg Radio.

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<v Speaker 1>The shares of Wells Fargo, they are up about two

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<v Speaker 1>tenths of a percent right now forty dollars and forty

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<v Speaker 1>nine cents. But earlier in the year this was a

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<v Speaker 1>fifty four dollar a share stock and would know that

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<v Speaker 1>Wells Fargo has not had the best of months. The

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<v Speaker 1>chief executive John Stump peering before two sets of regulators

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<v Speaker 1>in Washington this week to speak about allegations and efforts

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<v Speaker 1>on the part of investigators to learn more about accounts

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<v Speaker 1>that were open for people that for all intensive purposes

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<v Speaker 1>did not exist. Here to tell us more. Peter Anderson

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<v Speaker 1>he his chief investment officer, a fiduciary trust company. Peter,

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<v Speaker 1>always a pleasure, Thanks for joining me. You're welcome. Now

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<v Speaker 1>let's separate what is going on at Wells Fargo in

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<v Speaker 1>terms of investigations and the chief executives performance and role

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<v Speaker 1>in future and the actual bank because that may help

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<v Speaker 1>us guide, you know, the guide the conversation about what

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<v Speaker 1>the stock is actually worth exactly, and you know, I

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<v Speaker 1>think they're in line with problem him Uh. This past

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<v Speaker 1>week there has been a lot of focus on the

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<v Speaker 1>CEO's activities and appearing before two agencies to discuss this.

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<v Speaker 1>And while we don't want to understate the damage of

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<v Speaker 1>the scandal, I think a lot of focus has been

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<v Speaker 1>lost on the value of the stock and going forward,

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<v Speaker 1>what the plans will be to recover uh investor confidence.

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<v Speaker 1>And we're waiting. A lot of investors are waiting on

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<v Speaker 1>the sidelines, kind of in a holding pattern, to get

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<v Speaker 1>a sense of what the board of directors, for instance,

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<v Speaker 1>what they're thinking and what they might uh possibly propose

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<v Speaker 1>as a solution. There has been uh, they've been silent

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<v Speaker 1>on the issue so far. And you're a shareholder, Yes,

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<v Speaker 1>we are. We have a long term shareholder and uh,

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<v Speaker 1>we have a lot of confidence and faith in the company. However,

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<v Speaker 1>this period of I would say lack of disclosure is

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<v Speaker 1>somewhat of concern because we think we need more information,

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<v Speaker 1>as any stock analysts would to get a sense of

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<v Speaker 1>what the future cash flows are in factoring in what

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<v Speaker 1>their proposed solutions would be to the scandal. Well, let

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<v Speaker 1>me just play you a clip of Elizabeth Warren, senator

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<v Speaker 1>from Massachusetts, speaking on the panel. They were questioning the

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<v Speaker 1>chief executive John Stump of of Wells Fargo. Just listen

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<v Speaker 1>to what she had to say. You should resign, You

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<v Speaker 1>should give back the money that you took while this

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<v Speaker 1>scam was going on, and you should be criminally investigated

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<v Speaker 1>by both the Department of Justice and the Securities in

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<v Speaker 1>Exchange Commission. Harsh words from Senator Elizabeth Warren. Uh, Peter Anderson,

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<v Speaker 1>this has got to affect the brand? Or am I wrong? Well?

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<v Speaker 1>You know, I think what it should affect is the

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<v Speaker 1>board of directors. You know, their duty bound to respond

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<v Speaker 1>to this and UM. While the CEO certainly is in

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<v Speaker 1>the center of this firestorm right now, at least in

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<v Speaker 1>the public eye. You know, as an analyst, I would

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<v Speaker 1>say that you need to know what the the highest

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<v Speaker 1>leadership is thinking, which is higher than the CEO. Right

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<v Speaker 1>is that? But he's also the chairman, right, I mean

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<v Speaker 1>John Stump is also the chairman and chief executive. He is.

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<v Speaker 1>And you know a lot of government experts have been

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<v Speaker 1>saying for years that you should always separate those two

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<v Speaker 1>authorities because of situations like this. But there are independent

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<v Speaker 1>directors that certainly our duty bound to come forward and mentioned.

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<v Speaker 1>Not only what I would say is disclosed and proposed,

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<v Speaker 1>So disclose what's happened. And I well, John, I give

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<v Speaker 1>you an example. John Chen, the chief executive of BlackBerry

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<v Speaker 1>is on the board, yes, of Wells Fargo. Have you

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<v Speaker 1>received any information from them? Have they given you any

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<v Speaker 1>indication about anything uh? Publicly the board? As far as

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<v Speaker 1>I know, the only uh disclosure they've given was the

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<v Speaker 1>notice about clawback UH for the the two very highlighted

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<v Speaker 1>individuals right now, the CEO and the other person. But

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<v Speaker 1>other than that, we do not have anything official. So

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<v Speaker 1>for instance, let me give you An example him that

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<v Speaker 1>might help investors modeled future cash flows is if the

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<v Speaker 1>board were to have an investor conference call and disclose

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<v Speaker 1>and propose what they are thinking in terms of fixing

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<v Speaker 1>this going forward. I think that would give more clarity

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<v Speaker 1>to the situation. You know, as investors, most analysts are

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<v Speaker 1>looking to companies for guidance rights for things as basic

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<v Speaker 1>as earnings. So this I put this kind of in

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<v Speaker 1>the same category, only even uh more highly ranked in

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<v Speaker 1>the sense that if they can give us information and

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<v Speaker 1>how they might fix this, there would be clarity and

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<v Speaker 1>we could go forward with our analysis. And Peter Anderson,

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<v Speaker 1>I just wanna offer a little bit up of your resume,

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<v Speaker 1>uh Harvard, Yale, Northeastern Physics. Maybe the physics will come

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<v Speaker 1>in handy with this with this particular situation. And also

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<v Speaker 1>previously the head of multi asset wealth management at Congress

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<v Speaker 1>Wealth Management. Um, is there a click a time a

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<v Speaker 1>time frame here? I know we're on a time clock,

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<v Speaker 1>give you about ten seconds. Is there a time clock

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<v Speaker 1>for the board of directors? Well, time is their enemies

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<v Speaker 1>of him, and as I would urge them to quickly

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<v Speaker 1>propose a solution and then we can get back to

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<v Speaker 1>our Bloomberg terminals and do the analysis. I want to

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<v Speaker 1>thank you very much for joining me. Peter Anderson is

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<v Speaker 1>the chief investment officer at Fiduciary Trust Company. They're based

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<v Speaker 1>in Boston, home to Bloomberg, shairs of Microsoft. I mean,

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<v Speaker 1>beg your pardon. Shares of Wells Fargo are up a

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<v Speaker 1>quarter of our percent. Right now, you're listening to taking Stop.

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<v Speaker 1>This is bloom Blog coming up on taking stock. We're

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<v Speaker 1>going to take stock of the election and what would

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<v Speaker 1>happen if there's a big post election market move. Which

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<v Speaker 1>way would it go? That's next