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SORRY, NOT SORRY
Wells Fargo gave it the old college try, attempting to earn back the public’s trust with a series of TV commercials apologizing for shady practices … but the US Justice Department wasn’t having it. The US Attorney’s Office for the Northern District of California has ordered the bank to pay a $2.09B civil penalty for misrepresentation of loan quality.
Long story short, Wells Fargo allegedly handed out loans to people who knowingly misstated income information and generally didn’t meet the bank’s underwriting standards. With the settlement, the San Francisco based bank will not need to admit liability.Wells Fargo’s “if it doesn’t fit, you must acquit” moment? Pointing to the fact that other banks have been hit with similar penalties, and that no individual consumers were harmed in the making of this unethical behavior. The US economy wishes it could be so lucky.
Water Cooler Talking Point: “As I write this from my one bedroom apartment that I’ll likely rent until I die, I can’t help but mutter the phrase ‘this is why we can’t have nice things.”
MET MOST EXPECTATIONS
Tesla reported earnings that can best be described as “not the worst.” Revenue was slightly up ($4B vs. an expected $3.9B), losses were higher than expected ($3.06 loss per share vs. $2.92 expected) … and Elon was really, really sorry. Like, really sorry.
Somebody took their lithium this morning. An audibly sedated Musk did the unthinkable: he apologized to Joseph Spak of RBC who he referred to as a “boring bonehead” during last quarter’s conference call. He also apologized for being tired.
The most controversial guy on Twitter not named Kanye indicated that burning cash like Pablo Escobar wasn’t a problem. In fact in the earnings release, Tesla claimed $2.2B of cash on hand. Elon also reiterated how good his team is at building 5k cars per week.
Oh, and the man who thought it would be a good idea to make flamethrowers available to the general public still believes his company will be profitable by Q3.
Water Cooler Talking Point: “There was no indication that time spent trying to save those kids stuck in the cave in Thailand had any effect on earnings per share.”
SPRECHEN SIE TECH?
Germany’s largest conglomerate this side of the Audobon, Siemens, has completed the purchase of Mendix, an application development platform technology company, for $700M.
Siemens specializes in electrification, automation, and digitization of industrial manufacturing. Think of them as the dedicated vomit cleaners at Disney World. It’s basically their job to stay behind the scenes.
Mendix specializes in “low-code” application development (read: coding for dummies). The benefit is that people without programming backgrounds can create programs via user-friendly interfaces. Siemens CEO of Digital Factory, Jan Mrosik noted these types of programs will allow the company to develop their digital enterprise, specifically cloud services and the Internet of Things.
Water Cooler Talking Point: “GEe, I wonder if there are any US conglomerates who are wishing they had started investing in forward-thinking technology years ago?”
IN OTHER NEWS
- Yesterday, the Federal Open Market Committee decided to hold interest rates steady, as expected, but was more bullish on the economy, calling it “strong” vs. “solid,” the term it used back in June.
- Facebook and Instagram have made it much easier to control “passive-zombie scrolling.” That is if you’re willing to navigate the labyrinth of settings and menus where the company’s new screen-management tool resides.
- Target won’t renew a contract with Haneswear for the tighty-whitey maker to manufacture “C9,” an exclusive brand of activewear. Your dad’s beer league softball team and your mom’s jazzercise class were outraged by the news. Everyone else continued to wear Nike and Lululemon.
- Asset Management firm, The Carlyle Group will acquire 20% of DSA Reinsurance from AIG. The deal will give the Carlyle Group access to $6B that it will be tasked with investing.
- Molson Coors (Canada) will partner with HEXO to create a non-alcoholic cannabis-based beverage … that will essentially be the opposite of Four Loko.