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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Madharry who wrote (34139)	4/11/2009 5:40:25 PM
From: Spekulatius	Read Replies (3) \| Respond to of 78673

re WFC - there is little question that WFC can generate very strong profits. However I am somewhat curious about how the generated such a strong profit. They did take in a lot of iffy loans with the Wachovia acquisition (hence the strong reserving) and I also wonder if they can hang on to all the Wachovia customers as well. WFC's CD rates are very small while Wachovia was more competitive, so i think quite a few deposits might go. On the asset side WFC fairly large home equity book may not be adequately reserved since the unemployment just exceeded 10% in CA (where WFC is big) and housing prices made another leg down (more than 10% just in the last 2 month). I think they want to push the stock up to issue more stock, that's just my guess.