Dumb & Dumber — Bad Company, Misuse of Money, and “The” Dumbest Thing
Welcome to Wells $treet, where I wrap up every month with a rundown of all that went wrong in the world of finance, business, and money.
The point of this exercise is twofold: 1) highlight bad behavior we can all learn from, even the perpetrators, and 2) give readers some anecdotes to win the chitchat wars at social gatherings, like the Super Bowl party you’re being forced to go to.
Let’s get started.
DUMB — Bad Company
Chevron reported a record $35.5 billion profit in 2022, more than doubling its earnings from the year before. Yay, Chevron!
The oil giant has done so well that it’s using excess cash to discount gasoline prices (which peaked at $5/gallon nationally last year), while also investing in efforts to stop being a major water polluter along the Southern California coast.
HAHAHAHAHAHAHAHAHAHA… (inhale) HAHAHAHA… HA… HAAAA! (cough)
No, it’s not doing that.
Instead, Chevron plans to spend $75 billion in profits to buy back shares of its stock, taking those shares off the market, making the remaining shares more valuable due to scarcity. This is good for shareholders, who Chevron cares about more than customers and the environment (unless customers and dolphins are also shareholders).
Chevron has every right to manage its money any way it wants within the confines of the law, but drivers of gasoline-powered vehicles have a right to be angry (that would be 99% of us). The White House went nuts — though not nuts enough to embrace more domestic production to drive down prices. But environmentalists need to see the glass half full! The more money spent on stock buybacks, the less spent on drilling! As my environmentally-minded brother-in-law snarked, “Us ‘Green New Deal’ hipsters should thank them!”
THIS JUST IN: OMG, Exxon had an even better year, with a record $56 billion in profits, “a historical high not just for the company but for the entire Western oil industry.” I got in the wrong business.
DUMBER — Badder Company
Remember that $18 billion taxpayers (you) spent in Operation Warp Speed to fund Covid vaccines, even though we had no guarantee of success? Moderna received $2.5 billion of that money, back when it was just an up-and-coming drug maker that wasn’t planning to have a commercial product on the market for years. Your dollars and Moderna’s technology were just what the doctor ordered, lives were saved, and the company went from money-losing startup to multi-billion dollar “mRNA juggernaut.” Yay, Moderna!
Now Moderna is showing its appreciation for all your help by charging $110-$130 for future Covid vaccines. Same with Pfizer, which also received $2 billion from you. Glad I got my vaccines when the government (you) paid for them.
Honorable mentions:
— People who lost money to bankrupt crypto companies are reportedly selling their creditor claims for cents on the dollar. This way they get something back, while the people buying those claims hope to land a better deal in bankruptcy court, pocketing the difference.
Now CNBC reports that the guys who started bankrupt crypto hedge fund Three Arrows Capital are trying to raise $25 million to start a company to buy some of these bankruptcy claims… even from customers of Three Arrows Capital.
DUMBERER — Mismanaged Tax Dollars
I got a debit card in the mail that I almost threw away. I thought it was one of those junk mailers trying to sign me up.
My husband stopped me. “I think that’s legit,” he said. He was right!
It was a California Middle Class Tax Refund debit card. I was instructed to call a number to activate the card and find out how much it was worth.
I made the call and learned it held $400, which I immediately transferred to my checking account. I have no idea how I qualified for the money, but since it was mine in the first place, I wasn’t going to protest.
Sacramento claims it’s handed out more than $9 billion in refunds to 31 million Californians, or 75% of the population.
Yay!
Except…
Last year Gov. Gavin Newsom projected California would have a $97.5 billion surplus. Instead, we’re looking at a $24 billion deficit. The state is now giving away money it no longer has.
DUMBERERER — Rep. Voldemort
Wells $treet reader Brendan Kelly reminded me why it’s so hard to trust anything the government says. “The Federal Reserve Bank of Philadelphia announced that only 10,500 net new jobs were added during the second quarter ‘rather than the 1,121,500 jobs estimated’ in previous employment reports,” he writes. The massive 99% downward revision only came after the hotly-contested November election.
There are other examples which stretch credulity, like President Biden’s hypocrisy over classified documents, or the U.S. Supreme Court — allegedly made up of the nation’s brightest legal minds — spending a lot of money on an investigation that failed to deduce who leaked its decision to overturn Roe v. Wade. Really? No one knows how any of this happened?
But the dumbest decision offered up with a straight face is the appointment of New York Rep. George Santos (assuming that’s his real name) to two congressional committees. TWO!
What will it take for Republicans to remove him? Shape-shifting into Voldemort? CBS’ Margaret Brennan persistently tried to get House Speaker Kevin McCarthy to address the issue, but he never did (go to 13:20):
Meantime, you are paying Santos’ $174,000 salary, which is why he will never voluntarily resign. Where else is he gonna make six figures and have free healthcare?
UPDATE: Santos today removed himself from the committees. But I’m betting he refuses to leave the job. He needs the money.
DUMBERERERER — Elon v. California
Elon Musk moved to Texas in 2020 in part to avoid paying California’s 13.3% state income tax rate, which also applies to capital gains from his stock sales. In Texas, the tax rate is zero.
But Elon may end up in the clutches of California tax authorities after all, and believe me when I tell you that they are very aggressive. When I moved back to California from Florida in 1987, California taxed my Florida income that year. “This is illegal!” I screamed. I was wrong.
CNBC’s Robert Frank reports that Elon has been spending a lot of time in San Francisco running Twitter, and under California law, he could be on the hook for any compensation earned during that period. That could also include income from Tesla and SpaceX, if Elon spent time running those companies while at Twitter HQ.
As if buying Twitter wasn’t dumb enough already.
DUMBERERERERER — A Bad Influence
Social Media influencers are being slammed for posting ridiculously expensive adventures that they didn’t pay for. It doesn’t look good when their followers are dealing with inflation and forced to eat Top Ramen.
Makeup company Tarte recently sent about two dozen influencers to the United Arab Emirates, where they lived it up. Here’s 22-year-old Alix Earle giving her four million fans a glimpse of the trip on TikTok.
Earle and the others are accused of being “unrelatable” and “tone deaf” by critics on TikTok, including one woman who — in the most TikTok-y response ever —expressed concerns about the Tarte trip as she puts on makeup made by another company.
DUMBEST — No Words
So your kid gets into Stanford and you mortgage the house to cover the $313,000 cost of a four-year degree. Then you discover you’re subsidizing a place where words like “grandfather,” “immigrant” and “American” are considered harmful (so is “dumb” — but this column proudly stands in protest).
Or… you send junior to USC, where you’ll pay even more — $321,000! — so you can boast that your child is outstanding in his/her/their “field.” Except at the USC School of Social Work, where “field” is being replaced by “practicum” because “field” has “slavery connotations.” This is the same school at USC where the former dean’s “practicum” included bribing a local official.
Or… say you spend your money on subscriptions to news publications that abide by the AP Stylebook, which last week announced that the word “the” should be dropped when describing certain groups. Its editors tweeted, “We recommend avoiding general and often dehumanizing ‘the’ labels such as the poor, the mentally ill, the French, the disabled, the college educated.” The tweet has since been taken down.
I made a joke, because that’s what I do.
I guess the French were insulted by being thrown in with “the college educated,” because the AP made a hasty retreat, something the French have been known to do.
When “the” is dangerous, I’m out.
I think we all know the difference between something heinous, like the n-word, and something rather tame, like “ballsy.” But America — er, Stanford prefers “The United States”— seems to be a country obsessed with proactively getting ahead of our allegedly hurtful language.
Do you know anyone who feels put down by the word “ballsy”? Who is triggered by “the French” or “field of study”?
Either they’re people who make good money stoking controversy from the edges, or they’re snowflakes with too much time on their hands. Either way, they’re looking to be aggrieved, and they’ll never be satisfied.
The good news is that Merriam-Webster’s parent company plans to have an IPO this year, and I’m going long on the thesaurus trade.
💕💕💕💕💕
SOMETHING WONDERFUL — Damar Hamlin
Now that I’ve gotten that out of my system…
I always like to end on something uplifting, a story that restores my faith in humanity. This month, I didn’t have to look far.
Damar Hamlin is a living miracle. Four weeks after nearly dying on a football field, Hamlin released a video.
“What happened to me on Monday Night Football is, I believe, a direct example of God using me as a vessel to share my passion, my love, directly from my heart with the entire world,” he said. “Now I am able to give it back to kids and communities all across the world who need it the most, and that’s always been my dream.” He thanked everyone from to fans to competitors who were “rooting for one kid’s life.”
The GoFundMe campaign Hamlin set up in 2020 as a toy drive has ballooned to over $9 million, and he’s reportedly partnered with the Giving Back Fund, a nonprofit that helps athletes manage charitable giving.
“I’m so excited now for the things that I have planned in the future for these kids, all across the country now,” he said. “With God’s guidance, I will continue to do wonderful and great things.”
Damar says he’s always wanted to be a role model.
He is.
I have the best readers. They are the opposite of dumb — Stanford prefers the word “nonverbal.” (“Stupid” is also out, to be replaced by “boring” and “uncool,” which is really stupid.)
Wells at her best! Pointing out the latest attempts to dictate to the world, and leaving on a positive note. Wells at her best! -- Wells at her best!