Want to know what I think about WFC? Ok, fine:
2008: WFC lies about business, raises dividends, people buy.
2009: WFC lies about business, cuts dividend, people buy.
If we can just keep eliminating the stupid buyers, the market becomes efficient. I think.
- Former PM and current New Jersey gas station attendant.
It is sort of odd that Wells Fargo seems to defy the rules. True, they haven’t been immune to the present downturn, but they seem to possess some kind of extra buoyancy that other financial firms are distinctly lacking. What? Warren who?
Although doing so was “very difficult,” Chief Executive John Stumpf said Friday the move was “absolutely right for our company and our shareholders because it will further strengthen our ability to grow market share and to continue our long track record of profitable growth.” A more-normal dividend will return “as soon as practical.”
The move will also help the bank repay the Treasury “at the earliest practical date,” Wells said, calling the need to service the dividend on the government investment “a significant cost to the company.”
Wells Fargo Cuts Quarterly Dividend [The Wall Street Journal]
Short….Golden West will bury these bitches!
Maybe they are the real buyers of all of that credit protection from AIG.
Where’s Cluzo on this one?
long…the puts, b1tches! even warren makes mistakes…I’ve said it before and I’ll say it again, these guys are a fraud. it’s amazing that they continue to drink the kool-aid even though the party ended long ago.
https://www.wellsfargo.com/downloads/pdf/invest_relations/2008_Exhibit13_pg103_168.pdf
take a gander at pg. 143 – “For these reasons, the total of the fair value calculations presented does not represent, and should not be construed to represent, the underlying value of the Company.”
ie. even though we have loans on our books listed at $844 bn, the fair value was really $830 billion, but if we marked them down, we would have to mark our equity down by a like amount, then our tce would drop below c’s (~1.9%).
https://www.wellsfargo.com/downloads/pdf/invest_relations/2008_Exhibit13_pg33_102.pdf
and how about this little disclosure on pg. 61: “Our Pick-a-Pay customers have been fairly constant in their utilization of the minimum payment option. Of our Pick-a-Pay customers, approximately 66% at December 31, 2008, based on number of loans, had elected this option. At December 31, 2008, approximately 51% of Pick-a-Pay customers had elected the minimum payment option in each of the past six months.”
something tells me that the ltv on all those “golden” mortgages is going to ratchet up in the coming months (anyone else see the unemployment numbers today?). the fact that over half of the people are picking the min payment option means that the principal balance is INcreasing while the underlying asset is DEcreasing. toast, toast I say!