Journal chill's Journal: Wells Fargo Earnings: First Leak in the Dam? 2
After being positive on the big banks, analyst Dick Bove downgraded Wells Fargo & Co. to "sell" on Wednesday. Why? I mean, after all, their earnings were up and so were profits.
But the Devil is in the details, and Bove read the details.
Bove said the "most disturbing" thing about Wells Fargo's results is that loan losses seem to be accelerating. Assets no longer collecting interest climbed 28 percent to $23.5 billion from the second quarter, Wells Fargo said, while the reserve to cover future loan losses grew by $1 billion from the second quarter to $24.5 billion.
That doesn't sound like a recovery to me. It sounds like the gov't threw a lot of money at the issue but something rotten is still buried underneath.
I find it hard to believe that Wells Fargo is the only bank in this situation. It will be interesting to see the other bank statements.
http://seekingalpha.com/article/168061-wells-fargo-earnings-first-leak-in-the-dam
The emperor (Score:2, Insightful)
Best short quote in the article, sums it right up: "The problem with relief rallies like the one we are seeing today is they are based on zero fundamentals."
Anyway, unlike most economic commentators, I see the housing collapse as being a good thing long range, not bad. Homes are necessities, so they need to be affordable.
Same with next gen cars. "Entry level" at 40 grand and change for the still vaporware volt is not affordable for electric cars to be mass adopted. And neither the prius nor the insight nor
Another article that follows this (Score:1)
Linked from your site
http://www.usnews.com/money/blogs/flowchart/2009/10/15/why-stocks-are-surging-as-jobs-disappear [usnews.com]
Well DUH. Their "earnings" are only up temporarily as they no longer are paying all those salaries. Just like the analogy I have used before, some tradesman pawning all his tools friday night, so all weekend he looks like he got rich and his "earnings" went up. Then monday morning comes and no work and no earnings at all.
These pseudo earnings, that have nothing to do with their