Posted on 04/09/2009 7:56:03 PM PDT by FromLori
BANKS ARE SITTING ON PILES OF CASH. Wells Fargo was one of hundreds of banks given federal funding last fall to spur lending. The Treasury Department gave the bank $25 billion.
(Excerpt) Read more at money.aol.com ...
Hard to tell what’s going on.
Wells Fargo didn’t want TARP money, or need it, but was forced to take the TARP money by Paulson for taking over Wachovia and it’s toxic assets. Libs are already crying that this is a success of socialism but in reality Wells Fargo has been healthy all along.
Or so this is what I have learned .
Wouldn’t much of this depend on how their balance sheets are accounting for TARP money?
Wells Fargo took $25 billion in TARP funds. How are they reporting that kind of asset for SEC quarterly and annual reports?
It’s obviously not income but until we know how they’re accounting for their holding this kind of cash any bank financial reporting is suspect to me.
It is called smoke and mirrors and a manufactured “recovery.” They, the hedge funds and the Saudis manufactured the crash now the faux recovery.
Many folks moving to them from the other banks.
I moved over BECAUSE they didn’t want the TARP money.
I spoke with a manager and they said they were getting many new accounts.
It sure is the banks are conducting their own stress tests, obama wants them to keep it quiet and
http://blogs.moneyandmarkets.com/martin-weiss/jpmorgan-chase-goldman-sachs-citibank-wells-fargo/
PMorgan Chase, Goldman Sachs, Citibank, Wells Fargo and More Than 1,800 Other Institutions Believed to Be at Risk of Failure Based on Fourth Quarter 2008 Data
what a joke somebody is LYING
You are 100% correct...Wells is very conservative and held itself from diving in head first like other banks did in many respects...
What I still strongly suspect is that once this earnings statement is dissected, it will create more questions then answers.
Wells has had some very creative accounting methods in the past.
I don't see how it's possible that Wells would have record profits in this environment unless current loans in default were redefined and assets valued in a different manner.
We shall see...
See post #3 here.
I mentioned this in an earlier post, but I was calling around about getting a mortgage. Wells Fargo closing costs were double that of other banks (and it wasn’t because of credit scores...ours are over 800.) So maybe that could account for some of the profit.
But I think it might have to do with “fancy” accounting techniques. That’s the problem with accounting methods, you can make a bottom line say what you want it to say. The stress test results were delayed, but the Wells Fargo CEO called the test “assinine.” Does that mean the stress test showed one thing and Well Fargo accountants say another? Time will tell.
Even the article stated that the losses they reported were “dubiously low, to some analysts.”
Certainly “tis a puzzlement.”
Thanks forgot all about that!
Do you consider this conservative...?
Bank Offers American Dream To Illegal Immigrants
Critics Say Program Sends Wrong Message
POSTED: 3:06 pm PST January 23, 2006
Wells Fargo is the first major California lender to offer home loans to illegal immigrants, 10News reported.
“We’re not required to ask the immigration status of any of our customers. That is the responsibility of the federal government,” Wells Fargo bank representative Jerry Ruiz said.
http://www.10news.com/money/6377080/detail.html
You want to know how well Wells Fargo is doing....just look at California. Wells Fargo’s mortgage exposure there is huge.
Time will tell.
I’m wondering what the difference is between what Dr. Weiss is arguing for and what he’s arguing against (apart perhaps from breaking up “weak megabanks” and allowing others to just fail).
Good question lets just post the whole thing and examine it.
Jupiter, FL, April 8, 2009 — Several of the nation’s largest banks, including JPMorgan Chase, Goldman Sachs, Citibank, Wells Fargo, Sun Trust Bank, HSBC Bank USA, plus more than 1,800 regional and smaller institutions are at risk of failure despite government bailouts, according to Martin D. Weiss, Ph.D., president of Weiss Research, Inc., an independent research firm.
Several large institutions received significant ratings downgrades from the prior quarter, including Citibank, downgraded from C- to D; Wells Fargo, downgraded from C- to D+; and SunTrust Bank, downgraded from C- to D+.
Yesterday, Dr. Weiss conducted an audio conference call attended by over 75 members of the press to discuss the findings. (To listen to the conference, turn up your computer speakers and click here.)
Also in the conference, he provided updated commentary on his white paper issued on March 19. Titled “Dangerous Unintended Consequences: How Banking Bailouts, Buyouts and Nationalizations Can Only Prolong America’s Second Great Depression and Weaken Any Subsequent Recovery,” the white paper names U.S. banks and thrifts believed to be at risk of failure, using that data to demonstrate that the U.S. government greatly underestimates the scope of the debt crisis, while overestimating its ability to effectively save troubled institutions without severe adverse consequences.
The debt crisis is much greater than the government has reported, according to the white paper. The FDIC’s “Problem List” of troubled banks includes 252 institutions with assets of $159 billion. The updated review by Weiss Research, however, shows that 1,816 banks and thrifts are at risk of failure, with total assets of $4.67 trillion, compared to 1,568 institutions, with $2.32 trillion in total assets in the prior quarter.
Five large U.S. banks have credit exposure related to their derivatives trading that exceeds their capital, with four in particular — JPMorgan Chase, Goldman Sachs, HSBC Bank America and Citibank — taking especially large risks:
At yearend 2008, Bank of America’s total credit exposure to derivatives was 179 percent of its risk-based capital; Citibank’s was 278 percent; JPMorgan Chase’s, 382 percent; and HSBC America’s, 550 percent, according to the Comptroller of the Currency (OCC). In addition, in the fourth quarter, Goldman Sachs began reporting as a commercial bank, revealing an alarming total credit exposure of 1,056 percent, or more than ten times its capital. Although the banking authorities have not defined how much exposure is considered excessive, Weiss believes that, as a rule, bank exposure to any single risk category should be limited to 25 percent of capital. Goldman Sachs has exceeded that limit by a factor of 42 to 1.
“Equally alarming,” writes Dr. Weiss, “is the fourth quarter OCC data demonstrating that record bank losses are spreading to interest-rate derivatives. Until now, bank derivatives losses have been limited almost exclusively to credit defaults swaps (CDS), which represent only 7.8 percent of the notional value U.S. derivatives held by all U.S. banks. In the fourth quarter, although the CDS losses continued at a near-record pace, we also witnessed record losses in the interest-rate sector, which represents 82 percent of the derivatives market: The nation’s banks lost $3.4 billion in interest-rate derivatives, or more than seven times their worst previous quarterly loss in this category.
“In the face of such enormous risks and losses,” Dr. Weiss continues, “it’s entirely unreasonable to expect the U.S. Government to offset them without unacceptable damage to its own credit, credibility and borrowing power.”
Dr. Weiss points to early signs that the credit of the U.S. Treasury may already be suffering some damage in the wake of government bailout programs such as the $700 billion Troubled Asset Relief Program (TARP), the Federal Reserve’s recent $1.15 trillion commitment to purchase bonds, and the $1 trillion Private-Public Investment Program (PPIP). For example, the cost of credit default swaps traded by international investors to insure against a future default by the U.S. Treasury recently surged to 14 times its 2007 level; while, more recently, the price of the 30-year Treasury bonds has fallen by 24 points.
“The ‘too-big-to-fail’ doctrine has failed,” concludes Weiss. In its place, he recommends the following steps to build a firmer foundation for a future recovery:
Abandon the unrealistic goal of saving all failing financial institutions, focusing instead on the goal of rebuilding the economy’s foundation in preparation for an eventual recovery.
Pro-actively downsize or shut down the weakest institutions no matter how large they may be; provide opportunities for borderline institutions to rehabilitate themselves under a strict regulatory regime; and give well-capitalized, liquid and prudently-managed institutions better opportunities to gain market share.
Seriously consider breaking up the weak megabanks, following the model of the Ma Bell breakup in 1984.
Build confidence in the banking system with better disclosure and transparency, including the public release of the confidential official ratings on all banks called CAMELS (Capital adequacy, Asset quality, Management, Earnings, Liquidity and Sensitivity to market risk).
Switch priorities from the battles we can’t win to the war we can’t afford to lose, such as emergency assistance for the millions most severely victimized by a depression.
Due to the nation’s solid infrastructure and knowledge base, Weiss is optimistic the U.S. can survive a broader banking crisis and even a second great depression, with good prospects for an eventual recovery, provided we make the right choices. Toward that goal, immediately following the audio press briefing yesterday, Dr. Weiss launched a national grassroots campaign with an online video webinar for over 50,000 investors that have registered for the event, while also inviting the press to join. (To view the 1-hour video, click here.)
About Martin D. Weiss, Ph.D.
Martin D. Weiss, Ph.D., founder and president of Weiss Research, Inc. and a leading advocate for investor safety, is a nationally recognized expert on banking and insurance company solvency. With more than 35 years of experience, Dr. Weiss has helped empower millions of investors to make better financial decisions through his monthly Safe Money Report and daily Money and Markets.
Dr. Weiss, along with Weiss analyst Mike Larson, specifically named nearly all of the major institutions that have suffered a financial failure in this crisis. Weiss predicted the demise of Bear Stearns 102 days prior to its failure, Lehman Brothers (182 days prior), Fannie Mae (eight years prior), and Citigroup (110 days prior). Similarly, the U.S. Government Accountability Office (GAO) reported that, in the 1990s, Weiss greatly outperformed Moody’s, Standard & Poor’s, A.M. Best and D&P (now Fitch) in warning of future life insurance company failures. (See the Weiss forecast track at http://blogs.moneyandmarkets.com/martin-weiss/the-only-ones-who-warned-ahead-of-time/ and the GAO report at http://archive.gao.gov/t2pbat2/152669.pdf.)
Dr. Weiss is a New York Times best-selling author with a new book, “The Ultimate Depression Survival Guide: Protect Your Savings, Boost Your Income and Grow Wealthy Even in the Worst of Times.”
For a full history of Weiss Research, Inc., please see http://www.moneyandmarkets.com/content/history.html.
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{ 1 comment… read it below or add one }
TeresaE 04.08.09 at 1:42 PM
Until Glass-Steagall is reinstated and the 2005 financial laws (most notably the Bankruptcy changes & doubling of mandatory minimums) are repealed, nothing is going to change.
We gutted our economy through off shoring & cheap foreign labor, grew the GDP based on free and easy credit and government exceeding its viability, then had the rug pulled out from under us.
The major banks are firing, or forcing into default, their best customers while smiling in our faces and saying, “we are relaxing lending standards”. To whom? Illegals? Foreigners? I don’t know, but I do know that any business plan that is based on forcing your best customers into insolvency is doomed to fail. As well as our country.
Yeah, If you read that column reeeal carefully, you’ll see where he says that Pat Buchanan is really the second coming of the messiah and Ross Perot was the prophet Elijah in disguise. Also, the numbers he mentions have a special significance that I will not reveal to you in public.
http://www.freerepublic.com/focus/f-bloggers/2226119/posts
o: adm5
I think you are right and take the mad money guy jim cramer telling people yesterday go for it well his charitable trust owns JP MORGAN, WELLS FARGO, ETC. He told people last year at the worse possible time if they needed any money take it out of the stock market (meaning invest in stocks) and look what a pile of crap advice that turned out to be!
Cramer’s charitable trust owns JPMorgan Chase and Wells Fargo.
Questions for Cramer? madmoney@cnbc.com
Questions, comments, suggestions for the Mad Money website?madcap@cnbc.com
© 2009 CNBC, Inc. All Rights Reserved
http://www.cnbc.com/id/30141252
33 posted on Fri Apr 10 2009 09:35:12 GMT-0500 (Central Daylight Time) by FromLori (FromLori)
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I didn’t say ‘PERFECT’...Every bank made and continues to make mistakes, after all fellow imperfect human beings do the work at the banks...
I would like to note that in the article you posted, Mr. Ruiz seems to have his facts a bit out of whack as every Mortgage Lender is required to obtain information on whether the borrower is a U.S. Citizen or not and if the borrower is not the borrower is required to show the documents they have to support their legal eligibility to work/live in the U.S. If the borrower cannot show legal residence either by being a permanent resident alien or that they have an acceptable work visa then they cannot obtain a mortgage loan. I’m sure mistakes/cheaters/liars made it through the lending process in more instances than anyone would like to see.
CA notwithstanding I’d contend the bank is still quite solid, yes conservative in it’s approach (perhaps better to say in comparison to their peers) and extremely diversified to weather the various ups and downs of market turns. I’m not going to deny that there is worse to come as CA is on shaky ground, but in the end WF should be one of the large banks who will end up on it’s feet and in great position to be very profitable when the economy starts to heal.
Just my opinion...
“I’m sure mistakes/cheaters/liars made it through the lending process in more instances than anyone would like to see.”
That is the crux of the problem. And the government isn’t going after the borrower fraud that has occurred with the financial crisis. Overstating income, lying about net worth, presenting fake IDs and on and on...
Wells Fargo was/is (??) giving non-citizens/illegals mortgages. Call it what you will. And our govt is complicit with the activity. Bank of America was/is giving out credit cards and loans to non-citizens/illegals.
This type of activity is costing the American taxpayers trillions of dollars in these bailouts. Wells Fargo did receive billions from those bailouts.
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