Wells Fargo announced that they will have record profits this quarter due to better and expected earnings from the Wachovia acquisition. This is the same bank that hand significant declines in revenue but was still profitable only a year ago. It’s amazing that they can bounce back so quickly given the challenging times. Even during their Jan 08 decline, the bank still made money and the CEO, John Stumpf, commented that 2008 would be a tough year for them but yet, they still made money, unlike Citibank.
As far back as 2007, Citibank warned that earnings were declining due to the mortgage backed securities that were of unknown value. Trying to figure out how much they either made or lost seems like a hunting expedition. The results are just so bad that you can’t even believe it is a real company. What happened to this bank? It just looks like it is run haphazardly.
It is unclear if the government should just let it fail or take it over. Clearly, whoever is running it should not run a bank. They have no clue what they are doing and have not had a clue for a while. It seems that they just might be too big to fail. Kind of a joke really. Too big to fail or rather way too connected to fail.
Maybe the banking crisis is over. It looks like the economy is picking up and earnings are looking better. All we have to do now is get people back to work and figure out how to not let this mess happen again. That would mean regulation, which will likely be too much, akin to Sarbanes-Oxley, which was in effect and this still went south. What a mess.
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