donzoab

Why Wells Fargo Is a Great Buy

Steve J, you're way off here. WFC had a AAA rating because the rating agencies fell down on the job. GE was AAA. They went to $5. If you believe the rating agencies you're just waiting to be cleaned out. Do some digging. Without all these continued false balance sheet items, wfc is still insolvent. They are just gambling that the economy and the housing market will turn around and save them billions in losses. Actual FASB standards would require them to write down HUGE losses in consumer, commercial and off balance sheet holdings. THis is a gamble with your tax $ as the executives cash out big on bonus's.


On Nov 05 07:48 AM Steve J wrote:

> donzooab,
> you state WFC "would be toast" if it were not for FASB rules changes.
> You need to review their 2008 balance sheet what 1) type of securities
> WFC had, 2) mix of depositors, and off BS 3) type of derivatives
> sold and bought in tandem with their liquidity.
> WFC had a AAA rating and 52 week high pps during late 2008 for a
> reason.

Why Wells Fargo Is a Great Buy

While I think longer term WFC is a survivor it is only due to the saving graces of political manipulation.
Without the suspension of FASB rules pertaining to off balance sheet holdings and mortgage servicing losses, ignoring mortgage and heloc losses and suspending foreclosures etc, this bank would be toast. Having Buffet behind you only helps bring additional support to manipulate the rules to suit your current problems.
Wachovia was one of the worst ponzi scheme banks in history. They paid employee bonus's on loans that were immediately underwater. Management pushed production over profitability and paid accordingly. Wells bought this mess while their own loan book was imploding.
Enter the government with tax payer money, fasb rules suspensions and SEC rule changes to support the stock. All at the expense of successful local banks that didn't participate in the securitization market.
Your thesis will most likely be right in the long run as the political machine is churning here, but reality is WFC is insolvent (and I didn't even get into their commercial losses). Nice to have friends in high places.

7 Reasons Not to Buy Berkshire Hathaway

There are just too many things wrong with this article on which to comment. First and foremost is the obvious lack or proof reading.
Most disturbing is the total lack of focus on the insurance float. This FCF gives Buffet enormous leverage in investments.
The only thing preventing Buffet from doubling the share price from here would be his death. His diet of cherry coke and dairy queen should hasten this. I don't use most of his companies products but recognize the value of the holdings.

Taking Issue with David Dreman

Interesting article if not oversimplistic. The disclosure at the end is the most interesting part. LONG WFC?? Not buying more? What are you doing to protect the position. Buy puts or sell calls. Do something. This just sit on it mentality is what is forcing retail investors to work for another 10 years. Shame. Stop pointing fingers. Almost every aspect of finance is involved here. Brokers/investment banks selling garbage to the masses, manipulating credit ratings w/ratings agencies, shorting products they are selling to their clients (IE Goldman shorting munibonds), and on and on and on.
The REAL culprit here is the legal system. Unless Tort reform is finally passed, lawyers will rule the world and society will continue to say "I am not responsible for my own actions" Let the penalty fit the crime.

Wells Fargo and US Bancorp - Hitch a Ride with These Two

Please, you have no real concept of what went on at Wachovia. They were the worlds true largest pyramid scheme. Their inept management rewards bad behavior, creates false production numbers that lead to large margin losses, then pays bonus's.???
IF WFC can swallow this culture without bleeding to death I will be impressed. The rats that fled to Morgan Stanley will surely kill them next.