Author Topic: WFC - Wells Fargo  (Read 385072 times)

Rabbitisrich

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Re: WFC - Wells Fargo
« Reply #30 on: October 09, 2012, 04:33:43 PM »
I've been wondering about these linked products as well. I looked for some big protective covenant that would protect WFC's interest, but these products seem relatively straight forward. Wachovia used to screw over small investors with linked securities that would take from principal to pay for unwinding hedges in the case of early termination.

There is nothing new about these linked products.  They've been doing them for well over a decade.  It wouldn't surprise me if WFC was a little late to the game on them, but they are typically very straightforward instruments.  I don't know anything about these specific ones, but on the surface there is nothing to be concerned about.

The problem is that you can track changing quality for many of WFC's products, but their structured offerings are a mystery. I'm relying on past history + behavior in other areas to feel comfortable, but that's a relatively sorry best-efforts strategy.


Palantir

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Re: WFC - Wells Fargo
« Reply #31 on: October 10, 2012, 08:06:06 AM »
How bad do you guys think the damages will be here? I don't directly own WFC, but I own DJCO, which is believed to hold WFC.....
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Arden

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Re: WFC - Wells Fargo
« Reply #32 on: October 10, 2012, 08:34:35 AM »
An article I read yesterday said it's a few hundred millions, which is much less than was lost yesterday in mkt cap.
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mysticdrew

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Re: WFC - Wells Fargo
« Reply #33 on: October 10, 2012, 08:51:01 AM »
An article I read yesterday said it's a few hundred millions, which is much less than was lost yesterday in mkt cap.

And my guess is they'll settle for even less than that.

Rabbitisrich

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Re: WFC - Wells Fargo
« Reply #34 on: October 10, 2012, 12:56:32 PM »
An article I read yesterday said it's a few hundred millions, which is much less than was lost yesterday in mkt cap.

It was a ~$3.7 B response to a $570 MM claim. Did BAC settle their false claims charge before they were charged? Perhaps the market fears the discovery process.

Uccmal

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Re: WFC - Wells Fargo
« Reply #35 on: October 12, 2012, 05:44:53 AM »
GARP tending toward value

jeffmori7

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Re: WFC - Wells Fargo
« Reply #36 on: October 12, 2012, 06:05:20 AM »
Thanks Al. And the stock is losing more than 3% in pre-market!

So far, 2 big banks, 2 good results!

Uccmal

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Re: WFC - Wells Fargo
« Reply #37 on: October 12, 2012, 01:39:09 PM »
Yeah, they were all down today.  I guess the rally this week was a pre-earnings rally.  Everyone is hung up on Net Interest Margins being tight.  My read a few weeks ago was that operation twist should improve NIM. 
GARP tending toward value

ItsAValueTrap

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Re: WFC - Wells Fargo
« Reply #38 on: October 12, 2012, 02:19:55 PM »
I think an important factor in investing is banks is return OF capital.  If you look through the history of banking, they find new ways of losing money all the time.  Every once in a while a whole bunch of them will go bankrupt.
Investment banks that do proprietary trading are a little worse.  Buffett keeps learning the hard way about prop trading (e.g. GenRe, Salomon Brothers).

I think what Buffett values in Wells Fargo is its management.  He doesn't think that they will do really dumb things.  Wells Fargo has also been around for a long time.
*Wells Fargo was one of many banks which had people squatting in their own homes.  I don't know enough about banking to figure out if management is smart.
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mankap

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Re: WFC - Wells Fargo
« Reply #39 on: October 12, 2012, 04:29:27 PM »
Operation twist will make NIM worse rather than improve it.In operation twist , Fed is buying long term treasury so it will lower the yield on long term treasury.This will lower the spread between long term and short term rates. NIM has direct  correlation  to spread between long term and short term rates.
Steeper the yield curve , greater the  NIM value would be.