Let's go back to the financial crisis and the practices that brought this country to its knees. Banks developed a fancy scheme whereby they absolved themselves of all risk from the loans they made. They simply wrapped them up in a bundle and sold them to someone else. What they were doing is essentially packaging and reselling "junk."

When the news of how bad things were became known, the markets froze and collapsed. No one knew who had which securities, and if they did, they didn't know their true value.

Continue reading Banks Lobby Against Risk Retention on the Loans They Make

Banks Lobby Against Risk Retention on the Loans They Make originally appeared on BloggingStocks on Sat, 02 Apr 2011 11:40:00 EST. Please see our terms for use of feeds.

Wells Fargo (WFC) was one of the banks to emerge the strongest after the financial crisis. As capital markets improve, we foresee Wells benefiting from and a greater presence than it had pre-recession relative to peers like Bank of America (BAC), Goldman Sachs (GS), JPMorgan Chase (JPM), Citigroup (C) and UBS (UBS).

Here we look at the key factors to watch in the coming months that support our $33.81 price estimate, which is around 10% ahead of the market price.

Continue reading Track These Three Items for Wells Fargo

Track These Three Items for Wells Fargo originally appeared on BloggingStocks on Sat, 26 Mar 2011 11:40:00 EST. Please see our terms for use of feeds.

U.S. Bancorp (USB) has approved a 150% increase in the dividend rate on U.S. Bancorp common stock to 50 cents on an annualized basis, or 12.5 cents on a quarterly basis. April and June option implied volatility of 30 is near its 26-week average of 29, according to Track Data, suggesting nondirectional price movement.

Wells Fargo (WFC) announced a special Q1 cash dividend on its common stock of 7 cents per share, together with the 5 cent per share dividend. April put option implied volatility is at 33, July is at 35, near its 26-week average of 34, according to Track Data, suggesting nondirectional price movement.

Options Update is by Stock Specialist Paul Foster of theflyonthewall.com.

Options Update: U.S. Bancorp Volatility Flat; Announces 150% Dividend Increase originally appeared on BloggingStocks on Sat, 19 Mar 2011 09:20:00 EST. Please see our terms for use of feeds.

When dealing with large companies, have you ever felt you were living through a scene from a Seinfeld episode?

In January Wells Fargo (WFC) completed a majority of its integration with Wachovia, and I fear it will take years working out the bugs in the system. I say this because I am a major client, shareholder and trader dealing with the company on numerous levels, and the past few weeks would be comedic if not so infuriating.

Continue reading Chasing Value: Wells Fargo, a Seinfeld Episode?

Chasing Value: Wells Fargo, a Seinfeld Episode? originally appeared on BloggingStocks on Thu, 10 Mar 2011 12:00:00 EST. Please see our terms for use of feeds.

Analyst Upgrades

• Wells Fargo (WFC) to conviction buy from neutral at Goldman.
• Adobe (ADBE) to buy from neutral at UBS.
• Fifth Third Bancorp (FITB) to outperform from market perform at FBR Capital.
• Vail Resorts (MTN) and Goldcorp (GG) to buy from hold at Deutsche Bank.
• OmniVision (OVTI) to overweight from neutral at JPMorgan.
• Penn Virginia (PVA) to hold from sell at Canaccord.
• Hub Group (HUBG) to outperform from market perform at Morgan Keegan.

Continue reading Analyst Calls: ADBE, AOL, CAT, CSTR, FITB, GG, GPS, MDAS, RIG, WFC ...

Analyst Calls: ADBE, AOL, CAT, CSTR, FITB, GG, GPS, MDAS, RIG, WFC ... originally appeared on BloggingStocks on Fri, 25 Feb 2011 11:30:00 EST. Please see our terms for use of feeds.

The past week's data-point-of-consequence for investors had to be investment decisions by Warren Buffett's Berkshire Hathaway (BRK.A).

Buffett ended positions in several stocks in the fourth quarter, including the Bank of America (BAC), Nike (NKE), Fiserv (FISV), Becton Dickinson (BDX), Comcast Corp. (CMCSA), Lowe's Co.s (LOW), Nalco (NLC) and Nestle (NSRGY), according to a filing, The Wall Street Journal reported.

Berkshire added to a holding of only one stock in the fourth quarter: Wells Fargo (WFC).

Continue reading Tell-Tale Stat: Buffett's Berkshire Divests Bank of America, Nike Stakes

Tell-Tale Stat: Buffett's Berkshire Divests Bank of America, Nike Stakes originally appeared on BloggingStocks on Sat, 19 Feb 2011 14:00:00 EST. Please see our terms for use of feeds.

JPMorgan (JPM) is one the largest and most diversified bank in the U.S., and offers services such as retail banking, commercial banking, asset management, investment banking, consumer lending and credit cards. Its main competitors include Bank of America (BAC), Wells Fargo (WFC), Goldman Sachs (GS), Deutsche Bank (DB) and Morgan Stanley (MS).

JPMorgan has benefited from a decline in provisions for credit losses that raised operating margins for its retail banking business. However, a weak economic recovery has resulted in a decline in average interest earning deposits and presents a potential concern for the multinational bank.

Continue reading JPMorgan: Upside and Downside Scenarios

JPMorgan: Upside and Downside Scenarios originally appeared on BloggingStocks on Fri, 18 Feb 2011 11:30:00 EST. Please see our terms for use of feeds.

Continue reading Closing Bell: Shaking Off Mixed Earnings (AXP, BA, GS, IBM, MOS, WFC)

Closing Bell: Shaking Off Mixed Earnings (AXP, BA, GS, IBM, MOS, WFC) originally appeared on BloggingStocks on Wed, 19 Jan 2011 16:20:00 EST. Please see our terms for use of feeds.

Wednesday morning, banking giant Wells Fargo (WFC) announced that its fourth-quarter profit increased sharply thanks to improving customer payment habits and lower reserves to cover "souring loans."

During the quarter, Wells Fargo reported net income of 61 cents per share ($3.2 billion), matching the consensus estimate. A year earlier, the company earned 8 cents per share ($394 million) thanks to a large preferred dividend paid to the government (this payment was not necessary this year). The bank's CEO John Stumpf stated that the bank's business segments "contributed to earnings as the economy started to gain strength."

Continue reading Lower Reserves Lead to Higher Profit for Wells Fargo

Lower Reserves Lead to Higher Profit for Wells Fargo originally appeared on BloggingStocks on Wed, 19 Jan 2011 12:00:00 EST. Please see our terms for use of feeds.

The earnings season ramps up this week. Analysts polled by Thomson Reuters foresee strong reports from such big names as Apple (AAPL), eBay (EBAY), IBM (IBM), General Electric (GE), Google (GOOG), Schlumberger (SLB) and Southwest Airlines (LUV). And fast on the heels of last week's big earnings beat from JPMorgan Chase (JPM), there will be plenty more results from the financial sector to peruse this week.

Among the financials expected to post double-digit earnings growth this week are Capital One Financial (COF), Morgan Stanley (MS), SLM Corp. (SLM) and U.S. Bancorp (USB), but the week's biggest earnings winner may be Wells Fargo (WFC).

Continue reading Week in Preview: Banks in the Earnings Spotlight

Week in Preview: Banks in the Earnings Spotlight originally appeared on BloggingStocks on Sun, 16 Jan 2011 12:30:00 EST. Please see our terms for use of feeds.

Continue reading Chasing Value: Pre-Christmas Quick Takes

Chasing Value: Pre-Christmas Quick Takes originally appeared on BloggingStocks on Thu, 23 Dec 2010 13:30:00 EST. Please see our terms for use of feeds.

Banks could face another mortgage crisis, according to Barron's, if they are forced to buy back subprime, Alt-A and options adjusted home mortgage securities they've sold prior to the financial crisis, mostly as mortgage-backed securities. Already some buyers, like Fannie Mae (FNMA) and Freddie Mac (FMCC), have enjoyed some success returning defective mortgages. And this could be just the beginning.

The banks, of course, are fighting vigorously to fend off these demands. As usual, the courts will have to settle the matter. The focus of the debate seems to be founded on the issue of representations and warranties that may or may not have been violated.

There are no surprises among the 11 banks mentioned. It is the conspicuous absence of names you might expect to find that is.

Continue reading Chasing Value: Banks, Barron's and Buffett

Chasing Value: Banks, Barron's and Buffett originally appeared on BloggingStocks on Fri, 26 Nov 2010 10:00:00 EST. Please see our terms for use of feeds.

Continue reading Closing Bell: Bulls Come Back Quick (ABK, BAC, AAPL, AMLN, CREE, FSII, WFC)

Closing Bell: Bulls Come Back Quick (ABK, BAC, AAPL, AMLN, CREE, FSII, WFC) originally appeared on BloggingStocks on Wed, 20 Oct 2010 16:20:00 EST. Please see our terms for use of feeds.

Options Update: Boeing Volatility Flat into EPS and Cash Flow Outlook originally appeared on BloggingStocks on Tue, 19 Oct 2010 09:00:00 EST. Please see our terms for use of feeds.

Bank of America (BAC), which recently announced it would halt foreclosures nationwide, is scheduled to discuss its third-quarter 2010 financial results Tuesday, October 19, in a conference call beginning at 8:30 AM (ET). You can catch a live webcast of the call at the company's website.

During the three months that ended in September, Charlotte, N.C.-based Bank of America continued it mortgage modification efforts and declared a quarterly dividend. Analysts surveyed by Thomson Reuters are looking for the leading lender to report that its earnings for that period were 16 cents per share, compared to a loss of 26 cents per share a year ago. Revenue is expected to total $27.2 billion, which is a 4.3% increase from the same period of last year.

Continue reading Bank of America Earnings Preview

Bank of America Earnings Preview originally appeared on BloggingStocks on Mon, 18 Oct 2010 16:30:00 EST. Please see our terms for use of feeds.

Daily market news shows stocks pulled back on Thursday, as 50 state attorneys general are looking into allegations that thousands of home foreclosures were improperly handled. Financials were hard hit with both big banks and regionals falling on the news.

JPMorgan Chase & Co. (JPM) fell 2.6%, Bank of America Corp. (BAC) was off 5.2%, and Wells Fargo & Co. (WFC) fell 4.2%. Regional banks like BB&T Corp. (BBT) and SunTrust Banks Inc. (STI) fell 2.14% and 4.23%, respectively.

Continue reading How to Avoid Striking Out in This Market

How to Avoid Striking Out in This Market originally appeared on BloggingStocks on Fri, 15 Oct 2010 13:55:00 EST. Please see our terms for use of feeds.

Warren Buffett's Berkshire Hathaway (BRK.A) has holdings that span many industries, like health care, consumer goods, energy, insurance, real estate, rail and so on. Because of this, he has a good perspective on economic sentiment. And, according to a recent speech at the Montana Economic Development Summit, Buffett is unabashedly bullish on things.

First of all, he thinks a double-dip recession is highly unlikely. Then again, it appears that many investors believe the same. But, the question is: Can the U.S. economy show more robust growth?

Continue reading Buffett Says the Economy Is Hunky-Dory

Buffett Says the Economy Is Hunky-Dory originally appeared on BloggingStocks on Tue, 14 Sep 2010 14:00:00 EST. Please see our terms for use of feeds.

Continue reading Chasing Value: No Double-Dip Recession

Chasing Value: No Double-Dip Recession originally appeared on BloggingStocks on Wed, 01 Sep 2010 14:00:00 EST. Please see our terms for use of feeds.

I have always felt that for all the blabbing we do -- or blogging, in my case -- we should try as best we can to be accountable for our good and bad calls. This report is long overdue, but I will post it anyway since all of my past year's picks and results have been made public.

The market was very harsh in the early part of 2009, filling investors fear and trepidation, and sinking to a March 9, 2009 bottom. Perhaps some of the bleeding has stopped, but the economy has not healed as bears and bulls seem to carry the day, or every other day.

Continue reading Chasing Value™: 2009 Results Crushed the S&P 500

Chasing Value™: 2009 Results Crushed the S&P 500 originally appeared on BloggingStocks on Tue, 31 Aug 2010 10:00:00 EST. Please see our terms for use of feeds.

You win some you lose some. This story is about one of my less successful investments, which I acquired and sold many years ago. Over the past four years, I have written many times about Intuitive Surgical (ISRG), by far my best stock investment, up 4,500%, give or take, over a ten-year period. I bought in at the bottom and held on for the ride, until last year when the market tanked and took Intuitive Surgical with it.

The other company was Superconductor Technologies (SCON), the makers of high-temperature devices that improve communications transmission quality.

Continue reading Chasing Value™: Tale of Two Tech Stocks (ISRG and SCON)

Chasing Value™: Tale of Two Tech Stocks (ISRG and SCON) originally appeared on BloggingStocks on Fri, 27 Aug 2010 12:00:00 EST. Please see our terms for use of feeds.