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The ongoing mysteries at Wells Fargo (NYSE:WFC) are under the microscope today at The Street.com:

Wells Fargo is involved in an "ongoing internal dispute" over financial disclosure, prompting the departure of its CFO and leading some officials at the bank to contact regulators over concerns the bank is being too aggressive in its accounting, according to an analyst report published Tuesday.

Who wrote about this a week ago? That would be moi:

I'm skeptical. Wells has a metric ton of dodgy garbage on- and off-balance sheet, and I have often written about it. Nobody has a damned clue about the real value (or lack thereof) that these assets have. I have long pointed out that of all the major financial institutions, Wells is the most exposed -- simply because, in terms of its capitalization, it is the thinnest of the majors when one looks at the off-balance sheet and potential contingent liabilities that are represented in those alleged "assets."

Wells is down 2.3% this morning as I write this against a generally-up tape and 0.5% gain for the XLF.

Incidentally, this issue is probably not Wells-specific. That may be where the first guy balked. But I continue to believe, as I have since this entire mess began, and my opinion is buttressed by the data I see on the Z1 every quarter -- that there has been no meaningful improvement in the actual performance of assets, but there has been a massive "improvement" in alleged value on the balance sheets.

This works right up until the cash flow catches up with you, and there is also plenty of evidence that banks are intentionally gaming that cash flow. HAMP "modifications" that turn mortgages into balloon notes with "forbearance" of principal and interest into the balloon are just one example; this allows the bank to count the mortgage as "100% money good," even though there's a huge negative amortization in the balloon. Thus the only way that loan is in fact "money good" is if there's a new housing bubble before either the loan matures or the homeowner has to move and sell.

You like that bet? Go ahead and take it.

I'll pass, and I have zero belief that the regulators and law enforcers will indict or imprison anyone when (not if) I'm proved right and this entire pile of garbage blows up.

Again.

Source: Wells Fargo's 'Ongoing Internal Dispute' Over Financial Disclosure