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Still waiting for the inevitable selloff but am not confident enough to put more than 5% of my portfolio on the idea. Still almost all cash.
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WFC slowdown in mortgage origination will hurt fee revenue and may be a sign that they got caught underhedged during the rate meltdown.
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WFC also has raised interest rates on conforming and FHA loans going from price leader to wanting to slow down business.
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WFC may be a great short here. They are still grossly underestimating the losses that will come out of the Wachovia portfolio.
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Bank valuations seem absolutely irrational.
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Be wary of any rally led by financials.
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This rally seems to be built on some very false optimism and should be ready to turn into a selloff soon.