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Non-Tech : WELLS FARGO

WFC 86.33

+1.1%

Dec 2 3:59 PM EST

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To: Jaime H. Ayalde who wrote (1052)	1/8/1998 6:23:00 PM
From: Barron Von Hymen	Read Replies (1) of 1281

I get a little superstitious when there's just too much bad news out there. Banks and savings & loans continued under pressure today as H.F. Ahmanson (NYSE:AHM - news) , California's biggest thrift, lost another $1 13/16 to $56 1/16. Washington Mutual (Nasdaq:WAMU - news) ticked down $3 13/32 to $57 13/16, and the aptly symboled Charter One Financial (Nasdaq:COFI - news) slid $2 5/8 to $54 1/2. Investors are worrying about the compression of the yield curve, but industry net interest income has grown in all but one or two years over the past 50 years. What has caused problems in the past has been loan losses and imprudent capital allocation, not squiggles in margins. As long as the current flat yield curve doesn't last for a number of quarters and banks don't do anything strange with their hedging strategies, most banks and S&Ls will be adequately hedged to handle the current interest rate environment while profiting from increases in non-interest income provided by accelerated mortgage refinancing activity.

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