The Leading Indicator

In the sterile world of corporate America, Denise Prudhomme’s 60 years of life did not rise to the level of tragedy, and her passing was briefly barely more than a dark sitcom. At around 7 a.m. on the morning of August 16th, Denise scanned her badge at Wells Fargo, for the last time very much as she had countless times before, and entered Tempe’s local Temple of Corporate Finance, a sprawling labyrinth of cubicles and glass partitions. There, perhaps with a warm cup of coffee in one hand and a cool mouse in the other, as she settled in for her daily toil, she died.

And nobody noticed.

For four days, until the 20th, Denise’s lifeless body slumped across her desk, burning the midnight oil so to speak. The office building hummed with mechanical whirrs and the faint echoes of remote work for, alas, the physical presence of employees had been reduced to a trickle following 2020’s biohazard of mysterious origin. Three floors above the heart and major arteries of office life, the anonymity of corporate existence reached its anticlimax.

Wells Fargo — a titan among Wall Street banks — navigates through crises, regulatory scrutiny, and market fluctuations with singular focus: profitability. If anything, Ms. Prudhomme’s dedication to onsite retirement may prove to be a leading indicator of the sacrifices more American workers can be expected to make before this decade ends. Beneath the bank’s stalwart exterior lies a heroic story of the drive for efficiency irrespective of any human cost, a story of the bottom line above all.

Indeed, Wells Fargo’s impressive stock performance since the beginning of 2023, a (+/-) 42% bump, is no accident.

Rather, it proves the strategic acumen of the board and executive management in these tense times. For example, the divestiture of its commercial real estate loan servicing unit to Trimont is a stroke of genius. The pivot streamlines operations and reduces exposure to volatile markets to refocus on more profitable core areas. By shedding non-core assets and personnel to concentrate on the high-margin divisions instead, Wells Fargo’s leadership is not merely surviving, but thriving.

The appointment of Alex Douklias as Vice Chair of Corporate Banking is another example of this brand of forward-thinking. With an eye on expanding services for large corporate clients, Douklias cements the bank’s leadership in this lucrative sector. For shareholders, these moves signal a commitment to delivering long-term value while maximizing profits.

Operational excellence is not just a buzzword at Wells Fargo; it’s the lifeblood of the bank. Consider the weekly chart of the stock price. My custom indicator, the Triple Differential Moving Average Braid, shows a well-established uptrend, with shorter-term averages consistently above their longer-term cousins. Such an alignment suggests bullish momentum.

However, as the stock price approaches overbought territory, indicated by the shrinking gap between the moving averages, the potential for a downside Mean Reversion rises. The more recent Point-of-Control of the Volume Profile, established by the 2021 lows, currently aligned with the bottom of the Braid, makes an obvious technical target.

While the boardrooms buzz and the stock market rewards the executives’ vision, Denise Prudhomme reflects the quiet desperation necessary to that sustain these titans. Her almost unnoticed departure is not a bug in the system, but a feature. A corporation as vast as Wells Fargo must focus on the greater good: the profitability and efficiency of the entire operation. Sometimes, this means that individuals are overlooked.

It’s not negligence, as some employees have asserted, but the reality of operating at scale decade after decade for over a century and a half.

The daily chart presents a zoomed-in perspective on the same story, with the indicators appearing slightly different on account of the lower time-frame. While the Braid still looks bullish, the shorter-term averages are converging and even crossing, signaling a potential consolidation, correction or even trend exhaustion. The daily Volume Profile suggests a heavy resistance at the high, making the recent move more significant to long term investors. The Point-of-Control again makes a juicy medium term-target for short-sellers, who of course will have tactics of their own for such trades.

In other words, a retracement near to the current daily Point-of-Control should surprise no one, and even be expected before any further price appreciation. Yet, such a move might also be a stutter step down to the potential Mean Reversion on the weekly timeframe, shown above, and last correspondingly longer.

The fact that Wells Fargo’s operations continued seamlessly, however, even with this blip in the news cycle unfolding on local channels nationwide, is a testament to its fixture status in the financial scenery. The machine kept running, profits kept flowing, the bank continued to deliver value to its shareholders, and nothing skipped a beat.

Again, the divestiture of the CRE loan servicing unit — along with nonessential personnel — admirably exemplifies this proactive belt-tightening. Employees are not the only ones making sacrifices, either. For their part, the board and the executive team fearlessly face market volatility, angry customers and spooked employees to make those tough calls that keep Wells Fargo not just competitive, but profitable.

Of course, there will always be those who argue that the human cost is too high, that the focus on efficiency and profitability comes at the expense of the people who make it all possible. Yet others argue the opposite, that the focus on people over profit is ultimately unaffordable, and indeed many can be profitably automated away. If anything, it’s a reminder that in the pursuit of growth, not every worker ant is supposed to have a happy ending.

Ergo, the trend of on-site retirements may therefore be expected to increase in coming years, especially as the ever-louder return-to-work imperatives grow teeth.

As expected, the company’s response was generously stoic: “We are deeply saddened by the tragic loss of our colleague at our Tempe office. Our thoughts and prayers are with their family and loved ones during this difficult time. Counselors, through our Employee Assistance Consulting service, are available to support our employees. We are fully cooperating with the Tempe Police Department in their investigation and will direct all further questions to them.”

Further, since disinfecting the air literally erases the stench of death, they assured their upset employees that the office had been “thoroughly cleaned.” Considering that it was the smell, not the sight or sound and not the undelivered work-product, that first attracted employees’ attention, the gesture is not only humane, but professional. Of course, no amount of bleach will wipe away those profits.

Despite investor satisfaction, though, several employees were quick to bemoan their supposed sour grapes. One even said “It’s really heartbreaking and I’m thinking, ‘What if I were just sitting there? No one would check on me?’”, adding, “To hear she’s been sitting at the desk like that would make me feel sick … and nobody did anything. That’s how she spent her last moments.”

Such self-importance will have a short shelf-life as the economy forces these entitled social insects to show their real instincts for what they are. Let’s not forget that the 16th was a Friday … it’s not as if the building was even open most of the time in question. Surely if the complainers had noticed something fishy in Denmark sooner, so to speak, the local money changers would have hosed down the stalls that much quicker. The math is simple; bodies are bad for business.

When it comes to employees’ list of wishes, let’s just say: Fear the Working Dead!

To be sure, Denise’s unceremonious exit was a product of corporate culture, where human beings are routinely reduced to ID numbers and email addresses, where presence is measured by a green dot on a screen rather than by genuine interaction. Then again, considering how much time these so-called human beings spend on their phones talking to nobody, the loss can be measured as a fraction of Ms. Prudhomme’s relatively insignificant annual income; the company will probably save money, even after expenses. Her passing was almost perfectly unobtrusive, unimportant until it became a logistical problem to solve, a line item on a corporate report. Her workload will be surreptitiously distributed between her erstwhile colleagues, if it hasn’t been already, and her position, though advertised, will most likely go unfilled.

Wells Fargo is not a small-fry podunk bank for dust farmers, but an institution with millions of stakeholders and billions of dollars in assets globally. Decisions made in its boardrooms affect not just employees, but shareholders, clients and even the financial markets. Denise’s flash-in-the-pan rise to temporary fame is not the story of the bank. The Wells Fargo story is one of resilience, strategic foresight, and relentless pursuit of profit. It’s the story of a bank that continues to adapt, to evolve, and to thrive, even in the face of death.

As the proverb says: “The Dog Barks; the Caravan Moves On.”