Are you kidding me? Wells Fargo was actually up today!

Efficient market my ass. WFC is NOT one of the best. If anything it's one of the best con men around. Did I say con men? I meant banks. In fact, Mr. Mortgage de-bunked WFC's "beat" last July very effectively:

“In the second quarter, Wells Fargo changed its policy toward charged-off home equity loans to 180 days delinquent from 120 days “to provide more time to work with customers to solve their credit problems and keep them in their homes,” the company said on Wednesday. The change deferred roughly $265 million of charge-offs in the second quarter. Approximately 900 customers with $90 million of home equity loans have been modified due to the change, Wells Fargo said.”

Also WFC has $84 Billion in their Home Equity Line/Loan portfolio (1/2 located in hard hit states like CA & FL). Given the massive house price depreciation we have seen, I seriously doubt that their Q2 loan loss provision of $3 billion will be sufficient (Hell just today UBS announced another $5 billion in write offs).

“As second lien borrowers see equity in their homes evaporate due to price depreciation, second liens become extremely vulnerable to loss. Which is why this stat matters more than most: approximately $35.6 billion of Wells Fargo’s $84 billion in home equity loans had combined loan-to-value ratios above 90 percent, according to the second quarter report. And that’s a figure based on automated value models, or AVMs, that were run in March 2008; were those AVMs run again today, it’s almost a sure bet that the number has gone up even further.”

If all that weren't bad enough, WFC just said it would take a charge on $480 million worth of exposure to Fannie and Freddie preferred shares.

Conclusion: Wells Fargo is in trouble