Analyst: Wells Fargo will need $25 billion more in capital.

[girl gone mad]

From http://www.bloomberg.com/apps/news?pid=email_en&sid=aNsEBgrV8HA0">Bloomberg:

April 13 (Bloomberg) -- Wells Fargo & Co., the second- biggest U.S. home lender, may need $50 billion to pay back the federal government and cover loan losses as the economic slump deepens, according to KBW Inc.’s Frederick Cannon.

KBW expects $120 billion of “stress” losses at Wells Fargo, assuming the recession continues through the first quarter of 2010 and unemployment reaches 12 percent, Cannon wrote today in a report. The San Francisco-based bank may need to raise $25 billion on top of the $25 billion it owes the U.S. Treasury for the industry bailout plan, he wrote.

First-quarter net income rose 50 percent to about $3 billion, Wells Fargo said last week in announcing preliminary results that topped the most optimistic Wall Street estimates and sparked a 32 percent jump in the stock. The bank attributed the profit to a surge in mortgage originations and revenue from Wachovia Corp., acquired in December. Full results are scheduled for April 22.

<[b>“Details were scarce and we believe that much of the positive news in the preliminary results had to do with merger accounting, revised accounting standards and mortgage default moratoriums, rather than underlying trends,” wrote Cannon, who downgraded the shares to “underperform” from “market perform.” “We expect earnings and capital to be under pressure due to continued economic weakness.”

Wells Fargo raised its provision for loan losses by $4.6 billion in the quarter, below Cannon’s estimate of $5.4 billion. FBR Capital Markets analyst Paul Miller wrote after the announcement last week that he expected a $6.25 billion increase.

http://www.bloomberg.com/apps/news?pid=email_en&sid=aNsEBgrV8HA0">more...

[dixiegrrrrl]

1. aargghhhhh

:banghead: :banghead: :banghead: :banghead: :banghead:

[soryang]

2. Not one more penny

They should be placed in receivership. When is this administration going to confront the problems instead of covering them up?

[spag68]

3. Wells Fargo

I actually hope they make it, as they are my mortgage company. they have been good to me and have never screwed up the escrow and are always availably on the phone. By the way, do you know that Wells Fargo and BofA were once the same company?

[CoffeeCat]

4. I find this befuddling...

Wells Fargo, is supposedly one of the most reputable banks. They are known for their conservative lending
and how they avoided giving out a lot of sup-prime loans. They are supposed to be the best...the good guys.

This really pisses me off, because last week--WF announced these amazing $3 billion earnings and the announcement
rocked Wall Street. The news was used to parlay a "good news in the banking sector" theme throughout the financial
media. The stock market went up hundreds of points the day WF announced this news and CNBC attributed the rise,
in large part, due to WF's awesome performance.

Now. We find out...oh well...the good news was really fancy-schmancy accounting and the result of acquiring Wachovia and
revised accounting. GEEEZ!!!

I'm so frickin tired of this manipulative BS! One minute, a company has wicked-awesome wonderful news and the market
soars. A few days later, we discover they lied their asses off and it's all smoke and mirrors.

I'd just like the truth. Please!

[Demeter]

5. Imagine Where Wells Fargo Would Be If It Had Gotten WaMu!

the mind boggles

[spag68]

6. Wall Street

Don't confuse news with the money grabbers way of getting people to invest so they have more to steal.

[girl gone mad]

9. Bingo. Smoke and mirrors.

These banks need to be put into receivership. The games need to end.

[sendero]

7. Gee didn't they just report a "profit"..

... makes you wonder if they really made anything.

[jimlup]

8. This would be more indication of the bottomless pit ...

We seem to be shoveling money into.