http://www.zerohedge.com/article/wells-imploding-loan-portfolio also, I recommend the referenced source:
Wells' Imploding Loan Portfolio
The fine folks over at WLMLab Bank Loan Performance have done a great job at updating FDIC loan data by various banks. Some of their conclusions:
Yet the most significant observations is the ticking time bomb that is Wells Fargo's 1-4 Family 90+ past due loans.
WFC's Construction & Development portfolio is also on the verge of implosion.
Conveniently, these loans are low on Non-Accrual rates, meaning that net interest income is not currently affected (and leading to a falsely high EPS number), yet once everything hits the fan, the bank will be forced to charge off a staggering amount of debt at much higher principal amounts. Perhaps any and all rumors about WFC's viability should be evaluated very carefully going forward.
Thanks for the post.
If they go down it could also spell trouble for their derivative partners. Wells Fargo is (was March31, 2009) the 7th biggest derivative contract holder with around $1.9 trillion. Will we be extorted again to cover derivative losses (e.g. AIG bail-out money going to GS and others) to keep the system from "blowing up."