Comments on: All’s Wells that lends well http://blogs.reuters.com/felix-salmon/2013/01/11/alls-wells-that-lends-well/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: traduceri romana daneza http://blogs.reuters.com/felix-salmon/2013/01/11/alls-wells-that-lends-well/comment-page-1/#comment-53607 Mon, 29 Sep 2014 14:00:30 +0000 http://blogs.reuters.com/felix-salmon/?p=20152#comment-53607 You created a number of good points near. I looked on the internet for that problem and located a large amount folks goes along with down with your internet internet site.

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By: weiwentg http://blogs.reuters.com/felix-salmon/2013/01/11/alls-wells-that-lends-well/comment-page-1/#comment-45528 Sat, 12 Jan 2013 12:19:56 +0000 http://blogs.reuters.com/felix-salmon/?p=20152#comment-45528 Disclosure ahead of time: I’m long Wells (actually Wells Fargo’s 2018 TARP warrants, but I’ve also been long the stock in the past).

Yes, Wells is a hedge fund like all the other big banks.

The good news is that it is much less of a hedge fund than all the others. I think they have a small investment bank, which they acquired when they bought Wachovia during the crisis. They didn’t have one before, they were solely a retail bank.

But still, Warren Buffett’s thing is that he mainly invests in companies whose management he trusts. He has very high trust in Wells’ management. And certainly, they have been the least unstable of all the banks. I very much doubt that Wells would put any significant sum in CDX.NA.IG.9. There’s nothing to stop that bar good management, but Wells has good management. Wells has always stuck to its knitting, and they’ve always known that whatever crap the other banks are spinning, they just need to stick to their knitting and they’ll profit well enough.

Of course, Wells may have exceptional management and exceptional discipline in keeping their hands out of the casino, but Wells is at the 90th percentile in terms of management quality and discipline. We can’t write public policy assuming that all the banks are as sane as Wells. Just as we can’t write public policy assuming that all of the banks which dabbled in investment banking had as good risk management as JP Morgan – because as it turned out JP Morgan was not as good as they thought they were.

If we forced the banks to break up, I personally would be unhappy for Wells, but it could well be the best step for the country. Or we could force all retail banks and all investment banks to hard divest. Whatever. I think we can be not skeptical of Wells and still think that the banks need major reforms.

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