I don’t get people selling anything gold with all the inflation, dollar in the crapper, companies falling apart, and the banks….oh those banks.  “They intend to liquidate 11.9 billion in home equity loans…”

Wells Fargo Plans $1.4B Charge on Loans

By MICHAEL LIEDTKE – 49 minutes ago

SAN FRANCISCO (AP) — Wells Fargo & Co. is absorbing $1.4 billion in losses on home equity loans that borrowers have stopped repaying amid a deepening real estate slump that’s turned into a financial sinkhole.

Until Wells Fargo disclosed its projected losses late Tuesday, the San Francisco-based bank had suffered relatively little damage in a mortgage meltdown that had already battered other major U.S. lenders.

“Clearly, this is a disappointment because (Wells) had been seen as better managers of credit than many other big banks,” said RBC Capital Markets analyst Joseph Morford. “But now they have a big blemish on them, too.”

After gaining 34 cents to finish at $29.83 in Tuesday’s regular session, Wells Fargo shares plunged $1.40, or 4.7 percent, in the extended trading that followed a Securities and Exchange Commission filing outlining the bank’s home equity loan losses.

“Maybe people are going to be freaked out about Wells Fargo’s losses, but they shouldn’t be,” said Punk, Ziegel & Co. analyst Richard Bove. “Wells Fargo isn’t superhuman and they made some bad loans just like everyone else.”

Like several of its peers, Wells Fargo will take its lumps in the fourth quarter by recognizing $1.4 billion in pre-tax losses, with most of the trouble concentrated in a bundle of high-risk home equity loans that the bank intends to purge from its books.

The fifth-largest U.S. bank also is retroactively registering $265 million in expenses tied to its share of the costs for a $2.25 billion settlement that credit and debit card network Visa Inc. reached with American Express Co. earlier this month. Wells Fargo owns a 5 percent stake in Visa.

The legal expenses will trim Wells Fargo’s previously reported earnings for the second quarter of 2006 by 2 cents per share and lop off 4 cents per share from its earnings for its most recent quarter ended in September.

Well Fargo intends to liquidate $11.9 billion in home equity loans that have been flagged as major problems. The nettlesome loans represent about 14 percent of the bank’s total home equity portfolio of $83.4 billion.

The bank said most of the delinquent loans originated from mortgage brokers or other lenders on the wholesale market and are concentrated in areas experiencing the sharpest declines in home values.

Although Wells Fargo didn’t pinpoint the troubled markets in Tuesday’s SEC filing, management has previously said the bank is experiencing its biggest headaches in California’s Central Valley and “auto-belt” states in the Midwest.

Wells Fargo is now steering clear of virtually all home equity loans made outside its own offices.

The cautious approach is a stark change from a few years ago when Wells Fargo and other banks sought to cash in on rapidly rising real estate prices by offering teaser rates on mortgages and lowering the bar to qualify for a loan.

Although Wells Fargo has maintained that it imposed higher standards than most other lenders, the bank still got dragged down into the mortgage morass as the sharp decline in real estate prices left borrowers owing more money than their property was worth.

The bleak market conditions has prompted more borrowers to default on their home equity loans, exposing Wells Fargo to hefty losses.

The first hint of Wells Fargo home equity trouble surfaced last month when the bank reported it lost $153 million on the portfolio in the third quarter, from $27 million at the same last year.

Wells Fargo’s chief executive, John Stumpf, spooked investors even further two weeks ago when he described the current real estate slump as the worst since the Great Depression and reiterated earlier projections that the bank’s home equity losses would continue to rise next year.

(This version CORRECTS 6th graf to reflect most of the trouble is concentrated in a bundle of loans that Wells Fargo intends to sell.)

Naw….we went from warm to cold now back to warm. The cold snap only lasted about 5 days. The darn winter wheat sure needs moisture along with more cold weather. Needs to go dormant for a couple of months. I’m afraid we’ll be lucky to see 1/2 the crop we had last year. How was the bird hunt? All the best.—-aggie.

Thanks for the beans update.   I promise not to buy put options on them because I would not know where to begin.   But I will check the price in a couple of days and see how it works out.  Thanks!

High intensity times we’re living in.  Everything is very volatile right now.  To not be worried right now seems ill advised IMO.

I think our friend Rosen is letting his Delta Ego get in his way. I just can’t see the kind of correction or pullback he’s expecting for the PMs and PM stocks. Another 5-10% in general and across the board, maybe, but even that is stretching it a bit. The violation he describes as “a first” in this bull market may be accurate, but his interpretation of it is questionable at best. He needs to subscribe to Deadeye’s Advisory Letter or tune in to our TENT.

Thanks a mil for the update, partner.

JBI

did you drag a little wood up a little closer to the house?<G>

rno

I’m right there with you and look at the long term charts when I get a little concerned. But I used to get REAL concerned. So what would we rather have? Gold going straight up every day or a chance to re-test, re-arm and buy more? I don’t yet want the coming blow-out yet. That will signal the beginning of the end. The right miners bought at a good entry point will be alright. Only if your timeframe is tomorrow for the final counting does the past couple of days matter. The last time I added physical gold to the stash was at 642 and it’s come a long way since then. I welcome another pullback orchestrated by the cabal as I can buy more at that point. I don’t have all I want to protect and ensure a future for my family yet ..a future not dependent on the totalitarian despots in our future .The real reward may still be a few years off.

The central bankers, the fed, the fall street financial houses are all in cahoots. So far we keep getting cahooted, but their game cannot last forever.
World Population 6.7 billion
US Population 301, 139,947 last census (not counting the illegal invasion of course)
Worldwide Derivatives 516 trillion - half a quadrillioin!
Potential to inflate currencies Unlimited
Gold supply Limited and rapidly being bought up
Think I want Gold for the future I see. We will probably get another rate cut in December. What will the effect be on the market and on gold?

soybeans gave a sell signal today on a second attempt. this trade is historically an 87% trade. soybeans are notorious for double topping so a low risk trade may present itself. if you are not an experienced futures trader, please go the option route. the futures market takes no prisoners and i don’t want to be the cause of your financial demise. not investment advice.

rno

This is a borrowed chart that shows the frustration we all are enduring

Macadamia nuts are one of the most volatile substances on the planet!  You just can’t get the cover back on before they all evaporate!

I’ve been thinkin’ the same crazy thing! I’ve watched GROW for a couple of years.  15ish just might be a good point to take the plunge on a few shares. Their funds have outperformed similar funds a lot of the time. Seems like I read that the stock (GROW) had been beat up by insider stock sales.   BTW…FGC….I think Frank is Canadian. All the best.—–aggie.

Rosen says the HUI was “violated” when it fell to 396….5 below the old high of 401 made during the last wave. He said this has never happened before during the last 6 years. He has pinned a lot of “negative vibes” on this occurance. To me it seems trivial. One stock in the HUI could have had a real shi**y day and caused this. This kind of analysis is just too much for me given the fundamentals behind the gold stocks. To predict a huge correction on something like this seems beyond reason. All the best.—-aggie. 

Boy, I didn’t know that GROW had pulled back that far.  I’ve always wanted to get into it, but the chart doesn’t look good right now..  Who knows, maybe it’s a good buy.  As you probably know, UNWPX or any mutual fund is just a collection of stocks.  Each day at the close, prices of the stocks in the PF are multiplied by shares held to determine the NAV of the fund so I can’t see how GROW’s action would impact UNWPX unless they held a bunch of GROW.  have a good one buddy…fun times.

Kudlow is an IDIOT!   He shows it day in and day out!  Of course that is just my opinion!