Wendy,Great stuff,I personally am not convinced Wells Fargo is deserving of AA rating which means I think they are too expensive for the risk being taken on. With that said, our Govt. seems to be willing to write big checks to keep some players alive. A little devil's advocate:We have no clarity on the value of toxic assets. We have no clarity on the amount of toxic assets held by any one entity. Net interest margin of 4.16 percent, highest among large bank peers...Why are they getting paid more for being in the same game as everyone else? Did they really price their risk better? How come they had pricing power when no one else seemed to? Is the risk/reward actually balanced? Only 1.5% of their loans are non-performing? Seems awfully near normal considering industry issues. Why on earth do they think provisions for 09 should be 1/2 of 08? Where is the statement of write offs and write downs that back that WAG up? This event was huge, it has the whole world in an uproar and its apparently been cured in less than 6 months at Wells Fargo? I go back to this lack of clarity on the value of the toxic assets. If the company did take a 68 billion hit they cease to be well capitalized. Tangible common equity will take a huge hit and its a tough account to write checks off of. How come taking in Wachovia is such a plus when they were in so much trouble they needed someone to take them in?I don't get it. The numbers only make sense to me out of context. jack
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