Well Fargo announced today $3 Billion in profits. It was fantastic news and it sent the stock market soaring.
However, one thing that didn’t get talked about was why they made so much money.
Wells Fargo CFO Howard Atkins discusses the banks $3 billion reported first quarter 2009 earnings. Atkins hypes the impact of mortgages to the bottom line, due to low interest rates and foreclosure selling no doubt, but shockingly admits at the 7:45 mark that with the writedowns that would have been required by Mark to Market the bank actually lost money on the quarter.
To put it another way, Wells Fargo made money because the government allowed them to play “let’s pretend your assets are worth something”.
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