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Wells Fargo: No More Dodging The Bullet?

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Not that most financial stocks haven't suffered, but Wells Fargo seemed to be keeping its own. Fueled by the presumption of better underwriting standards during the credit crisis, a strong dividend tradition and its association with Warren Buffett, the firm seemed at least somewhat resilient to attack. No more, apparently.

Wells Fargo & Co., the biggest U.S. bank by stock-market value, may need to raise $10 billion and cut its dividend after the acquisition of Wachovia Corp., wrote Atlantic Equities LLP analyst Richard Staite.
Staite, based in London, downgraded Wells Fargo to "underweight" from "neutral" today and said the bank may announce disappointing earnings this year because of the deteriorating economy. Wells Fargo reports fourth-quarter earnings on Jan. 28.
"With the accelerating decline in house prices in California and surge in unemployment we expect them to suffer significant losses in 2009," Staite wrote. "Given the weak economic outlook there is a chance the dividend could be cut as a way to conserve capital."

As we print this Wells Fargo is down 14%. Alarming since it was down 9% when we started writing this article.
We aren't usually ones to say "We told you so," but we don't mind pointing out that a friend of Dealbreaker had Wells pegged 6 months ago.

No matter what, even if WFC has managed to walk through this period relatively unscathed, I do not think this helps the case for the financials as a whole and would absolutely be a seller (if only I could!) of any rally. I'm going on record: this is a bear trap.

Wells Fargo May Need Cash, Dividend Cut, Staite Says [Bloomberg]


Layoffs Watch '15: Wells Fargo Securities

Cuts are said to be going down today.

Small-Time Crooks No Longer Welcome At Wells Fargo, Bank Of America

Richard Eggers knows what we're talking about. The former farm boy speaks deliberately, can’t remember the last time he got a speeding ticket, and favors suspenders, horn-rimmed glasses and plaid shirts. But the 68-year-old Vietnam veteran is still too risky for Wells Fargo Home Mortgage, which fired him on July 12 from his $29,795-a-year job as a customer service representative. Egger’s crime? Putting a cardboard cutout of a dime in a washing machine in Carlisle on Feb. 2, 1963. “It was a stupid stunt and I’m not real proud of it, but to fire somebody for something like this after seven good years of employment is a dirty trick when you come right down to it,” said Eggers of Des Moines. “And they’re doing this kind of thing all across the country.” Big banks have been firing low-level employees like Eggers since the issuance of new federal banking employment guidelines in May 2011 and new mortgage employment guidelines in February. The tougher standards are meant to weed out executives and mid-level bank employees guilty of transactional crimes, like identity fraud or mortgage fraud, but they are being applied across-the-board thanks to $1-million-a day fines for noncompliance...Bank of America has embarked on a similar firing binge to shed any employee convicted of a criminal offense involving dishonesty, breach of trust or money laundering, employment attorneys say. Wells Fargo fires Des Moines worker for laundromat incident 49 years ago [DMR]

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Nuns Are Pissed At Wells Fargo

You've done it now, Stumpf.