I should know

Credit Markets Take a Beating

Wells Fargo’s Chairman, Dick Kovacevich, was fit to be tied at the meeting with Bernanke; he did NOT want to sign the documents giving the Feds any ownership or “say” in Wells Fargo & Co, he did NOT want the money.

It took the rest of the CEOs in attendance, especially Ken Lewis, to convince him to “go along” with the plan “for the good of others”. He was told that if he decided to “op-out” he would look like he was “un American”. He and the others were told by Bernanke that “they had little to say about it”, if they didn’t take the money and sign the agreement THAT DAY, they would suffer the consequences (in so many words). Treasury Secretary Henry Paulson basically told the bank CEOs that they had to accept the government stock purchases for the good of the U.S. economy.

Yes, Wells Fargo & Co stock is down and yes, they will have more loan losses in the future, but far less as a percentage than 99% of the others. Wells is a conservative lender and did NO option ARMs on their own. They certainly obtained some heavy baggage with their Wachovia purchase, but they also got hundreds of millions in tax write-offs that they can use for years to come. They are now the nation’s biggest bank as far as bank branches. They are second in total assets and first in market cap. Short term, 12 to 18 months, their stock is going to be in the toilet, long term, they are the “bank” to own.

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On Jan 14 03:16 PM curbs-in wrote:


> John... You are long WFC? As I recall they were the bank that made statements in October that they were rock solid, then turned around and took the taxpayers money. Is that the same bank? Isn't that considered lying to investors? If they were so strong, why didn't they turn down TARP funds?