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To: Tommaso who wrote (82070)	12/19/2000 10:46:44 PM
From: energyplay	Respond to of 95453

WFC a California bank -land of energy crisis The Set up: Part 1 My premise is that Wells Fargo is largely a California bank (even though they were bought by Norwest out of Minnesota) and the Bank of America (BAC, also California based) said they had loan quality problems and Wells (which is in the same market) will have some too. Wells has been going up, BAC down the past few weeks. Part 2 - Energy Crisis in California A shut down or utility bankruptcy in California would make Wells start to match BAC. Wells has many small business loans, they don't have hedges, or even electrical backup. So this is a way (somewhat indirect) to play the California energy crisis. Risks : 1) Wells is a good company. 2) Greenspan might lower rates before the Jan. 30 meeting - he did it in 1997 or 1998. 3) Wells could pre-anounce good news. Timming - I expect either - 1) Wells will pre-announce problems (Risk is they will be solid) 2) California government and/or to either do something dumb or allow something bad (like PG&E bankruptcy filing) to happen. (Risk is that the adults - Greenspan, Cheney, new energy secretary, possibly a Judge - will stop this before it goes over a cliff) So need to have this break our way soon - Jan. 20 (inauguration) is a hard deadline, and I expect Greenspan to move before the end of December. So in a sense, it's a bet on the incompetence and/or venality of California Government, Versus Wells Fargo's management.