The Cynic: June 6

BUSINESS
This Week’s Business News

Wells Fargo is finally off the Fed's naughty list—time to party like it's 2016.

After seven years under a $1.95 trillion asset cap imposed due to its fake-accounts scandal, Wells Fargo has been freed by the Federal Reserve. CEO Charlie Scharf, who took over in 2019, led a rigorous turnaround involving leadership changes, job cuts, and improved risk management. Investors responded positively, with shares rising over 2% following the announcement.

The bank now aims to grow in areas like credit cards and investment banking.
Scharf plans to expand Wells Fargo’s presence in these sectors while avoiding further investment in the mortgage sector. The company also plans modest stock buybacks and increased dividends to boost investor confidence.

But with great freedom comes great responsibility.
While the asset cap's removal signifies a major reputational improvement, the bank must now pursue growth prudently to retain the efficient operations that have driven its 62% share price increase since February 2020.

Shein's shopping experience: where fashion meets psychological warfare.

The pan-European consumer organization BEUC has filed a complaint against Shein, accusing it of employing "dark patterns"—manipulative design tactics on its app and website intended to boost purchases. These include pop-ups discouraging users from leaving, countdown timers, infinite scrolling, and frequent push notifications.

Gamification features like the 'Puppy Keep' game keep users hooked.
In this game, users feed a virtual dog and collect points to win free items, incentivizing daily engagement. BEUC argues such strategies drive mass consumption, a core requirement for fast fashion's business model.

Shein says it's cooperating with EU authorities, but BEUC isn't buying it.
While Shein claims to be working constructively with consumer authorities, BEUC noted that the company had not accepted its request for a meeting. This action follows a prior EU warning to Shein over violations of consumer law.

OpenAI finds ChatGPT being used for malicious purposes by Chinese groups.

OpenAI has reported a rise in the use of its AI technology by Chinese groups for covert and malicious activities. These operations, though small in scale, reflect an expanding range of tactics, including creating politically charged social media content and assisting in cyber operations.

Some ChatGPT accounts were banned for producing misleading posts.
OpenAI found that these accounts generated content related to China, the U.S., and international topics such as tariffs and foreign aid. Additionally, AI was used to assist in cyber operations by conducting open-source intelligence and developing tools for tasks like password brute-forcing.

OpenAI continues to monitor and report malicious platform use.
Despite these challenges, OpenAI has secured a $40 billion funding round, bringing the company's valuation to $300 billion. The Chinese foreign ministry did not immediately comment on these findings.

REAL ESTATE
This Week’s Real Estate News

Home prices are expected to keep growing in 2025, says chief economist.

Lawrence Yun, chief economist at the National Association of Realtors, predicts that home prices will continue to rise in 2025. His forecast hinges on mortgage rates easing to 6.4% by the end of the year, alongside continued labor market growth with 1.6 million jobs added.

Inventory remains low, keeping upward pressure on prices.
Despite some regional variations, the overall housing market remains tight, with limited supply contributing to price increases. Yun emphasizes that the market is not experiencing a bubble, but rather a supply-demand imbalance.

Buyers may find some relief if mortgage rates decline.
If mortgage rates decrease as anticipated, it could improve affordability and encourage more buyers to enter the market, potentially easing some of the upward pressure on home prices.

Mortgage applications fall for the third consecutive week.

Mortgage applications have decreased by 3.9% from a week earlier, marking the third consecutive week of declines. This drop is attributed to mortgage rates hovering near 7%, leaving more homes listed for sale without buyers.

High rates continue to deter potential homebuyers.
The elevated mortgage rates are causing many prospective buyers to delay their home purchases, leading to a slowdown in the housing market. This trend is expected to continue unless there is a significant drop in rates.

Refinancing activity also sees a decline.
In addition to purchase applications, refinancing activity has also decreased, as homeowners are less inclined to refinance at higher interest rates compared to their existing loans.

Jerome Powell met with Trump, and the real estate world immediately clutched its pearls.

Fed Chair Jerome Powell recently held a closed-door meeting with Donald Trump at Mar-a-Lago, sparking speculation about the future of interest rates—especially among real estate professionals praying for rate cuts before their listings turn into tombstones.

Powell says he’d serve a second term if asked, but Trump hasn’t exactly RSVP’d.
While Powell made clear he hasn’t been offered a job by Trump (yet), and Trump hasn’t made any promises, the mere optics of the meeting had Wall Street doing interpretive dance routines about inflation. Trump’s 2017 pick for the Fed now sits in political no man’s land: criticized by Biden, still maybe useful to Trump.

For now, rates stay high—and everyone keeps guessing.
Despite the drama, Powell reiterated the Fed’s stance: no rate cuts until inflation really behaves. But that hasn't stopped brokers, builders, and bondholders from reading this like a horcrux tea leaf ceremony.

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BREAKING NEWS
This Week’s Headlines

🧱 Over 100 inmates escape Pakistani prison after quake—because even Mother Nature wants regime change.
A 6.0 earthquake shook Balochistan, and in the chaos, guards evacuated a prison—without bothering to count who came back. Spoiler: most didn’t.

🩸 Israeli strike near Gaza food aid site kills at least 15, say rescuers.
Another day, another “targeted strike” hits civilians waiting for humanitarian aid. Tel Aviv calls it war; the rest of the world calls it increasingly unwatchable.

🇮🇳 “Bleed India by a thousand cuts”—India’s top general says Pakistan’s playbook is over.
CDS Gen. Chauhan says India has redrawn the rules of engagement. Translation: the gloves are off, and the subcontinent’s simmering again.

🇳🇱 Dutch government collapses under Wilders’ anti-immigration push.
Geert Wilders tried to make the Netherlands great again. Instead, he made it ungovernable. Coalition talks collapsed—like Dutch housing prices soon will.

🧨 Boulder Molotov attack suspect allegedly wanted to “kill all Zionist people.
The suspect targeted a synagogue and Jewish center with explosives. Authorities are calling it an anti-Semitic terror plot; the rest of us are just wondering what decade we're in.

FUN
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ADVICE
This Week’s Business Advice

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