WSJ – Wells Fargo Cheated on Earnings Again!

Posted on August 14th, 2008 in Daily Mortgage/Housing News - The Real Story, Mr Mortgage's Personal Opinions/Research

Wells Fargo, which all of us in the mortgage business know should have stock piles of bad loans, was dismantled today by the Wall Street Journal.

The Journal, as well as most of the Street thinks they ‘avoided large subprime slip-ups’ but that is not the case.  They were a significant subprime lender through their retail, wholesale and correspondent channels.

They were also top second mortgage lender with $84 billion of this less-than-subprime paper still on their books. Their ‘Prime’ jumbos, which they still hold a great deal of, had some of the best (easiest) qualifying in the industry allowing up to 50% debt-to-income ratios, qualifying at interest only payments on a 95% combined loan-to-value deal in the $1 million range. They still consider these loans, many with a 621 credit score and above, to be ‘Prime’.  In the near future these will likely preform much closer to Alt-A than ‘Prime’. Lastly, the vast majority of their residential mortgage holding are in the bubble states with CA making up the most.

Wells Fargo was one of the first to really get into the Level 3 accounting scheme, which is likely where they keep dumping all of their bad paper. In Q2 of 2007, the following story broke, which very few understood at the time.

Jonathan Weil wrote Wells Faro’s deceptive accounting on Aug 22, 2007 in Bloomberg:

Aug. 22 (Bloomberg) — There’s the kind of earnings investors can take to the bank. And then there’s the kind the bank can show to investors. Word to Wells Fargo & Co. investors: Beware the second kind.

About $1.21 billion, or 35 percent, of its $3.44 billion in pretax income came from Level 3 net gains on the $18.73 billion portfolio of residential mortgage-servicing rights that Wells Fargo marks at fair value. These assets, known as MSRs, consist of rights to collect fees from third parties in exchange for keeping mortgages current, by doing things like collecting and forwarding monthly payments.

Today, the Journal put out a story entitled ‘Wells Fargo Stirs Doubts: Mo chinks are appearing in Wells Fargo‘s armor.” They point out some nifty things, but not all of their skeletons are mentioned.

  • “Wells Fargo, the No. 3 bank by market capitalization, trades at just over two times its book value, double the multiple the market is placing on J.P. Morgan Chase,.
  • Wells Fargo’s bottom line got a sizable boost from volatile trading income and a write-up of some mortgage-related assets. Investors shrugged, bidding Wells Fargo’s shares up nearly 50% since then.
  • 10q released Friday bolsters the fear that Wells Fargo’s earnings aren’t all they are cracked up to be.
  • more (Wells Fargo) assets are being classified as level three.The illiquidity often reflects reduced demand. This usually leads to banks taking big write-downs on those assets.
  • Level-three mortgages jumped $3.3 billion to $5.28 billion, but in the quarter Wells Fargo booked only a $43 million net loss on them. Wells Fargo declined to give more detail.
  • Past-due prime mortgages rose for many banks in the second period. Wells Fargo doesn’t break out a prime-mortgage delinquency rate.
  • Second-quarter filing said that level-three assets included collateralized debt obligations, securities that have caused huge losses for several banks.
  • The bank didn’t give the size of its CDO holdings or any changes in their value. It didn’t even mention CDOs in its first-quarter level-three data. Other banks’ disclosures of CDOs regularly contain such information.
  • Wells Fargo didn’t saywhether $860 million of CDOs cited in its 2007 annual report were the same ones referred to in the second-quarter filing.
  • Sharp run-up in short-term debt at Wells Fargo in the second quarter, which rose 60% to $86.1 billion…the bank could have problems if that funding source becomes less available.

In my opinion, Wells Fargo’s big problems lie in their $84 billion in second mortgages, which are worth pennies on the dollar. They have skirted this issue with everything they’ve got for the past year. For those of you who want to know more about the big banks and their home equity problems see:

 FITCH – BIG BANKS HOME EQUITY WOES fitch-home-equity-woes20080314.pdf

What I don’t understand is if Warren Buffett is so big on our country facing up to its debt problems, why is he supporting and buying into one of the banks that is going to the most effort to deny that it was one of the greatest enablers of unsound debt practices (home equity lending), and is now covering up both its role and the fallout from it?

**Below are two posts I have done over the past couple of months detailing second mortgages and Wells Fargo in particular. Please have a look. 


Posted on May 2nd, 2008

Fresh news out…S&P pulled a slick one. They STOPPED rating second mortgage RMBS citing “anamolous and unprecedented” borrower behavior. Here is a little piece from Bloomberg that enhances the previous story very well, calling all Home Equity loans ‘junk’.

Remember, this is a near $1.3 TRILLION market with the bulk belonging to very few banks such as BofA, Wells, Chase, CITI, Countrywide, WAMU, National City, GMAC and IndyMac. I put a couple of nice quotes below. This could turn out to be a fairly large story in the making.

Home Equity Lines of Credit and loans (HELOC, HEL’s, second mortgages) were the true ‘Home ATM Machine’ and could be a big wipe-out for the big banks. These loans were mostly used to avoid Mortgage Insurance on purchase and refinance loans over 80% LTV and went up to 100% of the house value in recent years. As a matter of fact, an appraisal or full documentation was often not required. These loans were very easy to get and primarily relied upon an electronic evaluation of the property value and credit score alone.

They are almost always a total loss when in default. This is because in many cases, the first and second mortgage add up to more than the property is worth, so the second mortgage lender does not get anything in foreclosure – it all goes to the first.  As a matter of fact, most second mortgage holders do not even bother with foreclosure proceedings any longer, choosing more traditional means of collection.

A few months back banks began to freeze consumers out of accessing the available credit on the Home Equity Lines. Countrywide kicked if off by freezing 122,000 in one swoop and WAMU follow-up shortly thereafter with a 50,000 line freeze.

Since then, most large named banks have began to freeze lines originated prior to 2008 or with original combined loan-to-values over 80% in regions where property values are substantially dropping. This just so happens to be the regions where these loans were done the most.

This hurt thousands who were not prepared. Many use these lines for highly legitimate purposes such as running a business, college tuition, a rainy-day fund or that brand new Mercedes.  Now, it looks as though the days of extracting all the cash out of your home through Home Equity Lines are gone for good.  This is probably a good thing in the long run, but just as with Jumbo money virtually vanishing overnight, these loans vanishing overnight will reduce housing affordability further extend the housing slump and perhaps cause some real damage to consumer spending.

For those of you interested in seeing the Big Banks Exposure to Home Equity Loans, this is a link to the Fitch report. It is ugly. Many of these banks have not yet begun to take write-downs on these loans. FITCH – BIG BANKS HOME EQUITY WOES  fitch-home-equity-woes20080314.pdf

Mystery Surrounds Wells Fargo’s Earnings

Posted on July 17th, 2008

Wells Fargo was one of the first to use heavy Level-3 placement of toxic paper early in 2007. Last quarter there was a debate on how they valued their mortgage servicing rights. If you remember, Wells beat last quarter from “mortgage banking.” Yeah, right. It seems like questions arise every quarter regarding the quality of their earnings, and yesterday was no different.This story concerns their massive $84B Home Equity Line/Loan portfolio, of which much is now under water due to massive house price depreciation.  Technically (and realistically) these have become unsecured. This is a real problem for banks.  By my estimates, Wells Fargo wildly under-reserved on their home equity exposure.

Not only did Wells change the time line for placing a loan into “default” by extending the term out 60 days, essentially hiding 60 days of defaults, but they are also using AVMs to determine value from March of 2008, even though the median home price has fallen 5.4% since then.

A 5.4% fall could have thrown double-digit percentages of home equity loans into an even more serious negative equity position, which would have required additional loss reserves.   Wells does not seem to care.  Maybe Buffett should urge them to come clean?  Or does the sage of Omaha think (real) home prices will come back to the frothy peak of the bubble, even in California?

As a note, about $12B of Wells home equity exposure is in first lien home equity loans, which do have a much lower default risk. However, such a massive amount is over 90% that even if you deleted all the other exposure, the $35.6B in high-risk is enough to do serious damage to shareholder equity. 

From Housing Wire:

Despite second quarter results that were better overall than analysts had expected, Wells Fargo & Co. remains under growing pressure from a deteriorating $84 billion home equity portfolio, bank executives said Wednesday morning

Wells has a substantial $84 billion portfolio of home equity loans — and half of those are located in hard hit states like California and Florida; of that total, it has carved out the worst $11 billion for liquidation, with rest remaining as part of its “core” home equity portfolio

In the second lien portfolio set up for liquidation, the percent of loans that saw borrowers miss two or more payments rose during Q2 to 3.6 percent, up from 2.79 percent one quarter earlier. The $73 billion “core” home equity portfolio saw a similar rise to 1.88 percent in 60 day delinquencies, compared with 1.71 percent in Q1.

So delinquencies continued to rise during Q2; net credit losses, however, did not. Charge-offs on second liens were actually down $104 million compared with first quarter 2008 — but don’t let that fool you.

The improvement was primarily due to a change in how the bank handles its home equity portfolio charge-offs; earlier in Q2, the bank extended its charge-off policy from 120 days to 180 days, in an effort to give troubled borrowers more time to reach a loan workout (or to protect earnings, take your pick.

Jamie Dimon, CEO of Chase, which originated roughly the exact same quality of home equity lines and loans, said much worse things about their exposure and performance. Keep in mind he has to paint the best picture he can. Wells Fargo’s report on this topic did not even come close to being as realistic, and half of Wells’ loans are in California and Florida, whereas Chase’s are more spread out. Chase reported a 5.5% charge off rate in Q2 and Wells less than 3.6%. A two percent difference is large when you have $84B. Who is wrong… Dimon or Wells?

“Home equity loans are also proving to be problematic; JP Morgan holds $95.1 billion in the category, and saw net charge-offs rise to $511 million in Q2 from $447 one quarter earlier. High CLTV seconds in particular are “performing poorly,” according to the company’s investor presentation.

Chief financial officer Michael Cavanaghsuggested that roughly 10 percent of the seconds on JP Morgan’s books are currently underwater — meaning that the borrower owes more on their combined mortgages than their home is worth.

“That could be headed to 20 [percent],” he said on the earnings call. “We can’t predict how homeowners will react when they go into negative equity.

“We’re assuming they won’t act well, but it’s possible things aren’t as bad as we expect.”

Wells Fargo changed its policy to hide defaults:

“In the second quarter, Wells Fargo changed its policy toward charged-off home equity loans to 180 days delinquent from 120 days “to provide more time to work with customers to solve their credit problems and keep them in their homes,” the company said on Wednesday. The change deferred roughly $265 million of charge-offs in the second quarter. Approximately 900 customers with $90 million of home equity loans have been modified due to the change, Wells Fargo said.”

Finally, Wells Fargo used old valuations from March. Since then the median home price in CA — where they are home equity-heavy — has fallen 5.4%. This could have thrown double-digit percentages of home equity loans into an even more serious negative equity position, requiring additional loss reserves:

“As second lien borrowers see equity in their homes evaporate due to price depreciation, secondliens become extremely vulnerable to loss. Which is why this stat matters more than most: approximately $35.6 billion of Wells Fargo’s $84 billion in home equity loans had combined loan-to-value ratios above 90 percent, according to the second quarter report. And that’s a figure based on automated value models, or AVMs, that were run in March 2008; were those AVMs run again today, it’s almost a sure bet that the number has gone up even further.”


27 Responses to “WSJ – Wells Fargo Cheated on Earnings Again!”

  1. And it is in this of company Warren Buffett invest ? Shame on you Warren. Finito. In my books, you are the same as the others. What a let down !

  2. Warren Buffett has joined the gang of the liars. The situation must be real bad to see even Buffett joining the gangsters. Anything to do a buck. The guy is worth 48 billion and he hangs with bums. Sorry it’s the only term I found. B-U-M-S from Wells Fargo. Who can you trust in the USA ? Not even good old Warren.

  3. NICE!!! I just picked up a ton of WFC puts today after reading that Fitch report you linked us to!!! I’ve made a bunch of money of WFC puts this year and I’ve been waiting for the opportune time to do it all over again!!!

  4. I will be joining you Kip. Good idea.
    Betting against Warren will be fun. Greedy Warren.

  5. hahaha….

    Mr. Mortgage, you have such a hard on for Wells Fargo. If this was SUCH a great piece, why was it HIDDEN on page C14? Dismantled? When the WSJ comes out with a dismantling of a company it is A1….

    Good job Mr Mortgage. I am actually surprised you read the Journal and you get past page A1…


  6. Mr Mortgage,

    I would think that the extension of defaults to allow negotiation of the debt with borrowers is a smart move. This actually might reduce their intermediate losses. There has been a great deal of condemnation on banks for failing to negotiate debt.

    This assumes that WF is really trying to salvage loans rather than just delaying the pain to another day. The future will reveal the truth.


  7. JoeBlow wrote: >>Mr. Mortgage, you have such a hard on for Wells Fargo. If this was SUCH a great piece, why was it HIDDEN on page C14? Dismantled? When the WSJ comes out with a dismantling of a company it is A1<<

    It ain’t so, Joe.
    WSJ’s “Heard on the Street” column, for those of you who may be new to all this investor stuff, is among the first things read by most WSJ readers. It is the hot topic column of the day.
    Has been that way for at least a few decades.

  8. My problems with their earnings release was the fact that they priced their assets on the first day of the quarter and you know asset prices fell during the quarter.
    The other issue was that buried deep within their 78 page they noted that default rates on their HELOCs was “N/A” as in we aren’t going to tell you. The average for other banks was in the 2.8% range, so they should have had a nasty write down here.
    Wells is the next Merrill. They will fess up to their lies next quarter.

  9. warren buffet’s a good man, he’s done a lot in his lifetime that he can be proud of. He must have been duped by the fancy balance sheet and apparent safety of wells.

  10. Agree. People forget that he isn’t some all-knowing deity.

    The corruption that go on in banks have no limits.

  11. I moved overseas nine years ago, so I’m viewing all of this from afar in total disbelief. Where is the media? Where is the investigating reporter exposing all of this BS? I watch CNBC every morning and I get disgusted thinking these people have to know the truth and they just keep reporting whatever story they are being fed. Talking Heads! That’s all that they are, that’s not a news show, that’s not reporting! They are just towing the government / company line. But in all fairness it doesn’t end there, it’s everybody (WSJ, Bloomberg, Financial Times, NY Post, etc., etc.,) if it wasn’t for the bloggers telling the true story, you would have to think the Ben & Henry show has saved the world and all is good.

    Does anybody remember Watergate? It took down a President that needed taking down because Tricky Dick was a crook! Why hasn’t the mainstream media blown the lid off this nightmare? Open government intervention to pressure a regulator to “not” do its job (Change accounting rules) is unthinkable and nobody seems to give a shit. Oh OK, life goes on. NO LIFE DOESN’T GO ON, that is “An in your face outrage” and every citizen should stand up and scream it out!

    I’m tired, I just get so mad it wears me out. Can someone please just answer the question? Where is the responsible mainstream media and why aren’t they doing their jobs?

  12. Jim, the MSM is doing it’s job and quite well I must say… They are marching to the socialist drum beat that the Democrats are offering up like the true sheeple that they are. Our conservative roots have been uprooted and the new wave has finally set in just as they planned. Unfortunately for them it finally came at a time when we are broke as a nation. If they try to take advantage of this situation then they will have to raise taxes alot and with that they will piss off a lot of people. The very people that rode on their backs for the last 20 years. That is the problem with socialism… it is good until it starts affecting you and indeed it does as it spreads like cancer throughout society.

    Well guess where we are at now? Cancer time, and as it creeps into each and everyone of us we will all realize how duped we have been. It is then that I believe we will see violence and radical behavior towards the Government, MSM and the “Establishment” in general. Unless off course they bow down and stop the pork barrel spending, put in place a balanced budget and lower taxes… not raise them. Fat chance of that happening in my opinion however so we are more than likely going to have the former take place.

    Too stupid to realize the outcome they will literally self destruct our country. Too bad for us we have to watch it play out and then react because we keep voting these same morons into office over and over and over again. Without control of our goverment as a nation we are doomed to corruption and bad laws meant for their best interest and not “We The People” as it was originally intended to be.

    Maybe someday the sheeple will get it or we will just wither away as a once powerful society that got manipulated into disaster (See Roman Empire) by the evil dictators of socialism. The egotistical rich and mighty so called brain trust who “We The People” elected into office over and over and over again…

    My Grandfather always told me:

    Be careful what you ask for because you might just get it…

  13. Jim,

    There is no msm – they have all sold out….we all have – does anyone here live in middle class suburbia? No one gives a sh@# but for themselves.The children are all spoiled and so are the parents. They all want $$$, but for the smallest of efforts. I have no idea where this has all come from, but here we are. I remember watergate, infact as a 7 year old kid my parents made me watch it on tv. I remember them telling me how important it was, of course I could have cared less then, but I remember now….but that was their point. In my middle class world you only win if your kid is a star cheer leader, baseball player, you drive a lexus, etc….there are no morals, from the top to the bottom….I agree with stu – vote them all out! This Nov. I am going to the polls, cast my vote for Pres. and then all the way down, no matter the party – if you are incumbant your out, you had your chance “muffed it”….

    My ears bleed too! This stuff is nuts!


  14. Calm down everyone. People are aware of this. You can’t just report the potential downfall of our economic system on boob-tube though. You will have mass panic. And we all know that mass panic is the last thing any society needs.

  15. od, I am not so sure that you are correct on that assumption… I think a real good dose of reality would do some good in our current situation!!!

    I am by no means advocating mass panic, but some amount of panic is appropriate don’t you think? Rose colored glasses have left the building my friend…

  16. Stu – I feel you make some very good points.

    Mr. Mtg – if I recall you mentioned in a post or video that you are an Ex-WF person. As a recruiter, I know the culture fairly well. I’ve found good people who don’t make it with Wells or leave on own generally have good things to say about them. Likewise people who didn’t make the grade, and refused to face the facts, hold a grudge. With all due respect, you write as though you are in the latter (only you know.) I wonder about your many attacks based on pure assumptions – which only makes my job harder. WFC has a unique business model which has been time tested thru many cycles – over decades. Granted all banks are being put to the test, to say the least, and only time will tell. What you say could very well be in the headlines in no time. However, WFC isn’t the only AAA rated bank in USA (and 1 of 2 in the world) just for anything. Guess I can only ask that you state and reference some proven verifiable facts. Other than repeating numbers & dollars of receivables, what did the WSJ state other than “strong” assumptions? Yes, its easy to make assumptions, and for many this is enough anyone needs to know, but as we have seen one size doesn’t always fit all.

  17. Don’t get me wrong. There will be pain. But, the more time the banks get to keep this crisi on “the down low”,(holding off the panic) the shorter the pain will be felt economically when the cat is out of the bag.

    Banks are not going away. Neither will their dirty standards or the corrupt system. These so-called “economic cycles” will continue to happen. The whole point of the game is to time them.

  18. Denial is always the best weapon in holding off these type of crisis. ; )

  19. GOOD NEWS—-The movie “IOUSA” will soon be out, and I really think it is just what the Doctor ordered to get this message to the dumbed-down masses!!

    Trailer is here—

  20. Wells Fargo Bubble Blower Bites Back:

    Wall Street debates outlook for Wells Fargo
    Sacramento Business Journal
    Friday, August 15, 2008 – 2:45 PM PDT

    Wells Fargo & Co., parent of the top bank in Greater Sacramento, is the subject of an intense debate among investors on how the credit crisis will affect the bank’s bottom line.

    San Francisco-based Wells is one of the nation’s largest lenders of residential mortgages and other consumer loans that could go bad depending on the toll a slowing economy takes on their pocket books.

    That leaves some on Wall Street waiting for the other shoe to drop on Wells Fargo.

    As the West’s largest bank, Wells Fargo’s fortunes and future are closely watched in the region. Given the relative strength of the Bay Area economy, some might be surprised how nervous lenders and investors are about California these days. For instance, some San Francisco businesses are finding lenders back East cutting credit lines as they seek to reduce their exposure to the Golden State.

    Wells Fargo recently filed its quarterly report with the Securities and Exchange Commission that offered more insights into the bank’s performance and triggered a volley between the Wall Street Journal’s Heard on the Street column Friday and analyst Richard Bove with Ladenburg Thalmann.

    Bove, in a report titled “Point-Counterpoint,” lowered his earnings estimates on Wells, but maintained his “buy” recommendation in his Friday report.

    “Loan losses are likely to be higher for all banks than estimated earlier and that includes Wells Fargo,” Bove said. He now sees the bank earnings at $2.21 per share this year rather than his earlier expectation of $2.34. Next year he expects the bank to earn $2.65 per share, down from $2.92 per share, and the 2010 estimate has been reduced to $3.16 per share from $3.45.

    “The outlook for Wells Fargo remains quite positive,” Bove said, pointing to reduced competition in both the capital markets and in West Coast banking. He urged clients to “buy this stock aggressively.”

    Specifically, he notes that Washington Mutual (NYSE: WM) has contracted its operations, Countrywide Financial is history. Bank of America (NYSE: BAC), he says, has less appetite residential mortgages as it integrates Countrywide. Out-of-staters, such as J.P. Morgan Chase (NYSE: JPM), KeyCorp (NYSE: KEY) and Zions Bancorp (NASDAQ: ZION), owner of California Bank + Trust, are pulling back from the California market, Bove said, adding that “the community banks in the region are very weak.”

    “The opportunities to expand the customer base in bad times should meaningfully enhance the bank’s secular opportunities in good times,” Bove said.

    While not addressing specific issues raised in the Wall Street Journal column, Wells Fargo responded to a request for comment by pointing to its top ratings from Moody’s Investors Service and Standard & Poor’s as well as the 10 percent dividend hike last month as signs of strength.

    “Wells Fargo continues to be the only bank in the U.S. to be rated ‘AAA,’ continues to grow, has a strong balance sheet, and has the strongest capital ratios in our peer group,” said Wells spokesman Chris Hammond. “Given the company’s diversification, Wells Fargo continues to perform well during the current economic cycle just as it has endured through all kinds of economic cycles during our 156-year history.”

    Bove, known for his outspokenness, took issue with some of the specifics in the Wall Street Journal column, saying that comparing Wells to J.P. Morgan is inappropriate. He said the bad loans and other problems the New York bank took on with the Bear Stearns deal in which “it dramatically overpaid for Bear Stearns to help the financial markets. Wells does not make a mistake like this,” Bove said.

    He notes the bank’s portfolio of collateralized debt obligations — a source of great pain for many banks and brokerages — is insignificant at less than $900 million, or 0.14 percent of the bank’s balance sheet.

    “Most banks that have CDOs have written off amounts that are many multiple times the size of the Wells Fargo total portfolio,” Bove said.

    Bove dismissed concerns raised in the Journal column over Wells Fargo’s (NYSE: WFC) jump in short-term funding, saying the bank is simply taking advantage of today’s lower cost of money in the wholesale capital markets. He also dismissed concerns about the growth of Wells Fargo’s so-called level three assets — those which cannot be valued based on pricing in the open market. Bove said Wells Fargo’s level three assets are primarily mortgages and mortgage-servicing-rights, which is the business of collecting mortgage payments from borrowers and distributing them to those who hold the loans.

    Bove anticipates that Wells Fargo’s ability to weather today’s financial storm will pay dividends on sunnier days ahead.

    “It is increasing its customer base in bad times,” Bove said. “In good times, customer memories will focus on the fact that when times were tough, Wells Fargo was the bank to go to.”

    Written by Mark Calvey of the San Francisco Business Times, an affiliated newspaper.

  21. Yup. I’ve been screaming about this movie for months. Too bad it won’t be playing in many movie theaters.

  22. Another typical rant filled with lousy analysis.

    How about taking the 2nd home equity book, applying a default rate and severity assumption to it and then running it through Wells income statement to ascertain the impact on income/capital? That would require actual analysis – something you seem unable to perform!

  23. Barron’s is saying FNM & FRE will likely be “recapitalized” in the upcoming months. No duh. Funny how everyone including the mainstream financial media has bent over backwards to not say the word “BAILOUT.” Everybody knows the deal already in this “free” market of ours: Privatize the profits, socialize the losses.

  24. Mr. M, your best medium is your video casts. Is data available by county for option arms? Maybe, just a ranking of the top 20 by percentage of homes financed through POA.

  25. Everybody’s missing the”& Company” part of Wells Fargo’s name. They are so much more than a mtg lender. WFC is involved in every aspect of the money business possible. They are like the Walmart of the finance industry. Wells Fargo is involved in every aspect of finance unlike your typical bank or mg company. Small business, mid size business, technology, commercial real estate, large corporations and the list goes on. Not to mention the fact that WF sold some of their mtg’s and retained the servicing rights on a hand picked portfollio. WFC has always been a cash rich company and I wouldn’t be suprsed if they made some power moves within the next 2 years. There’s over 80 different business that make up WFC. You think they have been in business for over 150 years and they don’t know what they are doing? From the Civil war thur the great depression, Nixon administration and now. Sure they are going to have losses, but they won’t lose.

  26. UBS estimates WFC is holding somewhere around $500 million in Fannie and Freddie preferreds.{A80BA738-16A4-4A2F-9287-AF3756D337FA}&siteid=yhoof2

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