Category: Articles

Foreclosures Surge & The Sun Rises in the East!!

Post author By ToddSullivan
Post date July 16, 2009

Regular readers will not be surprised by this news. Is it over? Not by a long shot…

IRVINE, Calif. – July 16, 2009 – RealtyTrac® (realtytrac.com), the leading online marketplace for foreclosure properties, today released its Midyear 2009 U.S. Foreclosure Market Report, which shows a total of 1,905,723 foreclosure filings — default notices, auction sale notices and bank repossessions — were reported on 1,528,364 U.S. properties in the first six months of 2009, a 9 percent increase in total properties from the previous six months and a nearly 15 percent increase in total properties from the first six months of 2008. The report also shows that 1.19 percent of all U.S. housing units (one in 84) received at least one foreclosure filing in the first half of the year.

Foreclosure filings were reported on 336,173 U.S. properties in June, the fourth straight monthly total exceeding 300,000 and helping to boost the second quarter total to the highest quarterly total since RealtyTrac began issuing its report in the first quarter of 2005. Foreclosure filings were reported on 889,829 U.S. properties in the second quarter, an increase of nearly 11 percent from the previous quarter and a 20 percent increase from the second quarter of 2008.

“In spite of the industry-wide moratorium earlier this year, along with local, state and national legislative action and increased levels of loan modification activity, foreclosure activity continues to increase to record levels,” noted James J. Saccacio, chief executive officer of RealtyTrac. “Unemployment-related foreclosures account for much of this increased activity, and the high number of borrowers who find themselves owing more on their mortgages than their homes’ are now worth represent a potentially significant future risk. Stemming the tide of foreclosures is a critical component to stabilizing the housing market, so it is imperative that the lending industry and the government work in tandem to find new approaches to address this issue.”

Now, part of the surge is the floodgates being opened by to foreclosure moratoriums being lifted by Wells Fargo (WFC), JP Morgan (JPM), Bank of America (BAC) and Citi (C). The simple truth is those actions only delayed and did not prevent the inevitable action.

We know unemployment will continue to rise in the coming months, significantly. For that reason alone we will see increased foreclosure activity. Add to this the coming option-ARM reset and we have many more foreclosures in the future……many more.

The silver lining is for those looking to buy a property or a vacation place, prices are going to continue to become more attractive.

Disclosure (“none” means no position):Long WFC, none

Tags housing

Articles

Thursday’s Links

Post author By ToddSullivan
Post date July 16, 2009

Idiot, Google, Oil, Stocktwits TV

– What else is there to say about this?

– I’d use it…there will be a day not to soon where I tell Verizon where to stick their land line

– Demand expected to resume in 2010

– This is a must watch folks

Disclosure (“none” means no position):

Articles

Thursday's Links

Post author By ToddSullivan
Post date July 16, 2009

Idiot, Google, Oil, Stocktwits TV

– What else is there to say about this?

– I’d use it…there will be a day not to soon where I tell Verizon where to stick their land line

– Demand expected to resume in 2010

– This is a must watch folks

Disclosure (“none” means no position):

Articles

Target Wakes Up To Join Wal-Mart on Health Care?

Post author By ToddSullivan
Post date July 15, 2009
1 Comment on Target Wakes Up To Join Wal-Mart on Health Care?

Two things on this:

1- Target (TGT) management has proven once again to be a step behind that of Wal-Mart (WMT)
2- There are no altruistic intentions here…..

From Dow Jones:

NEW YORK (Dow Jones)–Target Corp. (TGT) may join Wal-Mart Stores Inc. (WMT) in supporting the U.S. government’s drive to require all large companies to provide health care benefits to their workers.

The nation’s second-largest retail discounter behind Wal-Mart supports the program “in concept,” but would have to see the final language of any legislation to formally back it, Target spokeswoman Kay Rubbelke said.

Target has met with a number of different groups throughout the Senate and House to discuss the employer mandate proposal, Rubbelke said.

Rubbelke’s comments follow Wal-Mart’s creating a firestorm at the beginning of July by breaking with most other retailers to support the congressional proposals, which are part of President Barack Obama’s roughly $1 trillion effort to see that just about all Americans receive health-care coverage.

The so-called employer health care mandate is seen by the retail industry in particular as too onerous, given retailers’ reliance on legions of low-payed employees and the industry’s high turnover rate. Retailers say that meeting the mandate could force layoffs to pay the extra expense of coverage.

The National Retail Federation, the retail industry’s main trade group, is strongly lobbying against mandated coverage and has already fired back at Wal-Mart, asking members to strongly oppose its support.

The NRF has also spoken with Wal-Mart about its move and would likely approach Target if the retailer went the same route, said Neil Trautwein, the NRF’s chief health-care lobbyist.

Target, which like Wal-Mart, is not an NRF member, would be “embracing an ideal that is bad for the rest of retail and the rest of the general community,” if it ends up supporting mandated coverage, Trautwein said.

Target currently offers a number of health care plans with different levels of coverage and the majority of its eligible employees participate, Rubbelke said.

Target, like Wal-Mart, also operates in-store health clinics and pharmacies that could benefit from greater healthcare coverage.

Wal-Mart also operates a prescription program for employees of Caterpillar (CAT) and wants to expand it to other companies.

The health care mandate the House of Representatives is looking at would require most employers to provide workers with basic benefits or pay 8% of their payroll toward helping the government get them coverage, with potentially a lesser percentage for smaller employers. Measures that two Senate committees are considering would penalize most employers that don’t participate in the mandated coverage, Trautwein said.

Like I said when Wal-Mart made the first forray into the debate,:

Wal-Mart provides health care to it employees. Much of the competition does not. Should they then be required to, their cost basis for their business suddenly rises…considerably. Should that happen, in order to offset their new cost increases two things must happen. Either they offset it with pay freezes or reductions for new hires OR increase their prices to consumers.

Either scenario aids Wal-Mart immensely as it slows growth in their payroll and/or increases their competitive price advantage over the competition.

The same hold true for Target.

Were I a Target shareholder, I would be more than annoyed, especially given the recent contentious proxy battle that management is still reacting to Wal-Mart, not taking a leading role growing the business.

How? Target and Wal-Mart both stand to benefit substantially with increase health care coverage. Yet it is Wal-Mart in the forefront taking steps on the issue to capture that business, with Target now tagging along in a “oh yea, we could make money in that” moment.

I am making no opinion as to the national program, its costs/benefits etc to the economy as a whole. Regular readers can probably make an accurate guess where I come down on it. It does seem likely something is coming and were I a Target shareholder, I’d like to think my company would be out in front of the debate as a possible huge beneficiary.

Sadly, that does not seem the case…

Disclosure (“none” means no position):Long WMT, none

Tags ackman, tgt, wmt

Articles

FOMC Minutes w/Crib Notes

Post author By ToddSullivan
Post date July 15, 2009

For those who do not wish to read, here are the crib notes:

2009 GDP -1% to -1.5%
2010 GDP 2.1% to 3.3%
2011 GDP 3.8% to 4.6% (if you buy that, I got a bridge to sell you)
Unemployment 9.8% to 10.1%
Only a modest decline in unemployment in 2010 to 9.5% to 9.8%
2011 unemployment 8.4% to 8.8%
2010 & 2011 inflationrates 1.5% to 1.7% (dilusional)
Longer run inflation 1.7% to 2% (still dilusional)

FOMC 6.24.2009

Disclosure (“none” means no position):

Tags government

Articles

Inflation: Stocks or Bonds?

Post author By ToddSullivan
Post date July 15, 2009

“Davidson” submits:

Below is a chart of the SP500 Index and that of Barclay’s Intermediate Term Corporate Bond and Long Term Corporate Bond Indices. The simple answer to which did better was bonds. This because 1) when investors panicked they sold stocks and went to bonds thus keeping values high/yields lower than the rate of inflation and 2) bonds have maturity dates on which principal is returned. Bonds preserved value.

Stocks’ response to inflation was to fall till the earnings yield rose to compensate.

During the ‘70’s stocks earnings yields rose to 14% causing stocks to fall from the 20 P/E level of the ‘60’s to 7 P/E. This equated to a 67% decline in valuation and thus stocks under-performed bonds throughout the ‘70’s. See chart.

Disclosure (“none” means no position):

Tags davidson

Articles

Christmas in July……..Unique

Post author By ToddSullivan
Post date July 15, 2009

So Sears Holdings (SHLD) and Eddie Lampert are trying something else unique.

Time Reports:

Sears Holding Corp., which runs both the Sears and Kmart department stores, is running a Christmas promotion a full five months before Saint Nick leaves the North Pole with his reindeer. On both the sears.com and kmart.com homepages, customers are invited to “Shop Christmas Lane,” and are directed to deals on holiday ornaments, stocking stuffers and other winter-related merchandise. The Christmas goods will also be on display in 372 Sears stores throughout the country; the promotion runs through July 25.

With temperatures simmering and families spending summer days at the shore, most customers aren’t exactly in the Christmas spirit. So what convinced Sears, which has seen nothing but annual same-store sales declines at both its namesake and Kmart stores over the past four years, that skeptical shoppers want to open up their wallets for Christmas gifts now? “After the last holiday season, customers told us that they wish they had seen some of our merchandise earlier,” says Natalie Norris-Howser, a Sears spokeswoman. “People are buying earlier today. Also, customers have grown accustomed to the Christmas-in-July terminology, so we wanted to leverage that.” Norris-Howser also pointed to the company’s generous layaway offers for bigger-ticket items as an incentive for shoppers to do their holiday buying today.

In today’s environment, any move that attracts attention might be worth it. “Overall, it seems to be a pretty smart strategy,” says Pete Blackshaw, a brand strategist for Nielsen Online. “Doing it on the Web makes a world of sense. They are clearly getting some buzz, there’s a novelty effect. At a time when everybody is going to be competing around November to get attention, this is a good opportunity to potentially get in front of the line.” Blackshaw, who monitors how brands are perceived in the social-networking sphere, says the Christmas marketing has gotten positive feedback on Twitter.

The first reaction I had was…..WTF? But after think it through for a bit, I then thought, why not? Christmas is always a shopping must for folks, why not provide them easy access to its specific items well before the event? Every year retailers begin the holiday shopping season earlier and earlier, Sears just got the jump this year.

Put it this way, what does Sears have to lose? Nothing. Here what the move also does, it gives Sears a unique place in the mind of consumers. It goes to “top of mind” awareness. What Sears is doing is pounding away the message “Sears=Christmas”. After consumers hear it enough, when it comes time to do the shopping for the big day, they then are more likely to visit Sears either in the stores OR online.

Given what Sears has done with its website, drawing people to it is sure to increase sales via that channel.

This is keeping with Lampert’s strategy. It is a cost effective way to differentiate Sears from the rest of the retail pack. If it flops, there is little lost and if it is a hit (like last year’s early entry into layaway) the upside is huge.

The easiest way to judge it success since Sears does not talk much to the press is to watch Wal-Mart (WMT) and Target (TGT). If they begin copy cat programs, it will only be because they see Sears having success with it.

Disclosure (“none” means no position):Long SHLD

Tags SHLD

Articles

Value Investing Congress Speaker Update

Post author By ToddSullivan
Post date July 15, 2009
3 Comments on Value Investing Congress Speaker Update

For my money, this is the premier value investor event. Yeah, I know Berkshire (BRK.A) and Buffett have the “Woodstock for Capitalists” every year but let’s be really honest, by the time it is held, Buffett has been on TV 50,000 times that year and there isn’t really anything he says there that is “new”. Yes it is a great event (have been before) but as far as an event that provides actionable ideas in the value setting, it just isn’t it.

The Value Investing Congress in just that event.

Here is the current speaker lineup…

For the record, other than attending the conference and being a huge fan of it, I have no affiliation with it at all.

I plan on attending again this year and blogging/twittering about it live….

With any luck I’ll nab an interview with one of the more prominent speakers….. hint,hint out there…

Disclosure (“none” means no position):

Tags buffett, VIC

Articles

Dow Ag Makes Acquisition

Post author By ToddSullivan
Post date July 15, 2009

Dow Ag (DOW) is not acting like a company that is up for sale…

The Indianapolis Business Journal Reports:

Dow Agrosciences LLC said today it is acquiring the majority of assets of Illinois-based seed corn company Pfister Hybrids.

A sale price was not disclosed.

Under the terms of the agreement, Indianapolis-based Dow AgroSciences, a subsidiary of Dow Chemical Co. in Michigan, will acquire the Pfister brand and the sales and marketing areas, as well as the warehousing and administrative services. The Pfister brand will continue, and the company still will be headquartered in El Paso, Ill.

Pfister President Linda Brown will assume the title of general manager.

The addition of Pfister Hybrids will further expand Dow AgroSciences’ current seeds business in the United States as it anticipates introducing insect protection and weed control, and herbicide tolerance, technology within the next few years, the company said in a written statement.

“At Dow AgroSciences investing in innovation is the key to our future, and we look forward to building upon the Pfister tradition,” said Stan Howell, vice president, North America regional commercial unit for Dow AgroSciences.

Dow AgroSciences has global sales of $4.5 billion.

Pfister Hybrids was founded in 1936.

I’ve been adamantly opposed to a Dow Ag sale since it was first broached back in May. Since then Dow has risen funds through alternative channels and seems to be backing off the outright sale talk. These are all very good development.

So, what would be acceptable? A partial IPO of Dow Ag would do should it be absolutely necessary. What would be even better would be if they offered it to current shareholders first then sold any excess to the public (there would not be any).

Anyway, not often do we see a company about to be sold making acquisitions. That is the good news. It says to me that the “sale” of Dow Ag is becoming a more remote possibility as each days passes….

Disclosure (“none” means no position):Long Dow

Tags dow

Articles

Wednesday's Links

Post author By ToddSullivan
Post date July 15, 2009

Romney, McDonalds, Netflix, Adam

– The Onion does it again….

Mitt Romney Defends Himself Against Allegations Of Tolerance

– Wasn’t there a rap song … “this is how we do it…”

– I love Netflix and an Amazon/Netflix combo is a perfect match. That being said, Adam is always on top of anything options

– Adam on the SPY

Disclosure (“none” means no position):

Tags mcd

Articles

Wednesday’s Links

Post author By ToddSullivan
Post date July 15, 2009

Romney, McDonalds, Netflix, Adam

– The Onion does it again….

Mitt Romney Defends Himself Against Allegations Of Tolerance

– Wasn’t there a rap song … “this is how we do it…”

– I love Netflix and an Amazon/Netflix combo is a perfect match. That being said, Adam is always on top of anything options

– Adam on the SPY

Disclosure (“none” means no position):

Tags mcd

Articles

Global Recession Chatter Falls & Spending Gains

Post author By ToddSullivan
Post date July 14, 2009
1 Comment on Global Recession Chatter Falls & Spending Gains

Good news? Some very large populated countries are seeing strong spending growth. Bad news? It isn’t the US and Canada

From the recent Current:

James Russo, Vice President, Global Consumer Insights for The Nielsen Company says: “While discussions about the recovery are still quite low, we have seen that the public is talking less about the recession — often dramatically less.”

“Of the countries we examined, Spain had the closest margin between discussions of the recession and recovery. In other words, there were only 26 percent more chats about the recession than the recovery”

“In the U.S., we found that recession discussions have dropped since hitting a peak in January. There appears to be a strong correlation between what consumers are saying in discussion groups and their subsequent actual purchase behavior.

“From the end of 2008 to March 2009, when recession discussions were highest, we found that sales actually declined by 2.3 percent. From mid-March to early June, as recession chats dropped, we found that sales actually showed a modest increase”

In all countries measured this month, consumers are saving more of their money – even Americans, who have had a low savings rate, are holding onto their cash as concerns about unemployment and financial security continue.

Additional highlights from this month’s NEC:

· U.S. consumers pulled back on shopping and how much they spent per trip. Meanwhile, the shift to value channels such as supercenters, club and dollar stores continued, as did the move to private label store brands.
· Spending increased in Brazil and England
· Spending declined in U.S. and Canada
· China, France, Germany, India, Italy and Spain showed no movement from the previous month.

There were two chart that spoke volumes (click both charts to enlarge):

On a global scale in almost every country the “chatter” for lack of a better word on recession seems to have had a rather large fall. What is not accompanying that is “recovery” talk. That leads us to chart two:

What is happening globally is that as the recession talks wanes, a cautious consumer is resuming spending in certain areas. This does give some credence for those who want the “unprescedented economic recession” talk from government officials squashed a bit. I understand being honest with the voters, BUT, I am not sure it is necessary to tell us hourly how if we do not “act now”, catastrophe is sure to follow. We get it, lighten up.

No, I am not blaming those who are using such talk for the recession but what I am saying is that those actions do not help the mood of the consumer. It causes them to act very rational, they just do not spend.

One interesting point here is the strength from China, India and Brazil. What is the possible investment for their growth assuming one does not want to invest in individual names on those markets (I don’t).

For those looking to invest in commodities like oil (USO), with US supplies falling, one should assume the growth in those nations will begin to extract any excess global supply of oil from the market, putting a bid under current prices.

Here are a couple videos that underscore the point.

Well, can’t we just produce more? Not really. Let’s look at rig counts (from Baker Hughes (BHI) as of July 9):

US Rig Count is down 12 from last week at 916; down 1,006 year over year. Canadian count is up 13 from last week at 178; down 236 year over year. US Offshore count is 37, down 5 from last week; down 30 year over year. Worldwide count for June 2009 was 1,987, up 4 from the 1,983 counted in May 2009 and down 1,282 from the 3,269 counted in June 2008.

Simply put, demand for oil will well outstrip supply for it when the worm turns. As demand falls these rigs are slowly removed from service. There is a considerable lag that occurs when demand resumes before they are put back into service as producers want to be sure the demand is real and not a short term aberration. If you believe a 2nd half recovery is in store for the US (or at least stabilization) then oil prices would seem to have no place to go but up. We have already seen US supply levels falling as production has been taken off and the economy’s slide has lessened. Any uptick in activity ought to cause a nice spike in oil (for investors).

Disclosure (“none” means no position):none

Articles

Wisconsin Supreme Court Rules for Defendants

Post author By ToddSullivan
Post date July 14, 2009

A win for the paint industry in the latest consumer product litigation scam.

Jane Genova reports:

Today, MEALEY’S LITIGATION REPORT issued a special e-mail bulletin on the long-awaited Wisconsin Supreme Court ruling in “Ruben Baez Godoy v. E.I. duPont de Nemours and Co., (DD) et al.”

MEALEY’S editor James Cordrey reports, “The Wisconsin Supreme Court today unanimously affirmed an appellate court ruling and held that lead pigment is not defectively designed, dismissing a lead-poisoned boy’s claims for strict liability and negligence against the former manufacturers of white lead carbonate pigment.” The appellate court had affirmed the circuit court’s ruling.

As the defendants have kept declaring in this litigation, the Court agreed that “the Circuit Court correctly concluded that the complaint failed to state claims for defective design. A claim for defective design cannot be maintained here where the presence of lead is the alleged defect in design and its very presence is a characteristic of the product itself.”

Cordrey points out that WI SC also said that even though the feasibility of an alternative design can be considered when evaluating a design defect claim, it isn’t a requirement. He goes on to explain that when the ingredient can’t be designed out of the product, the Court noted that the Restatement [Second] of Torts instructs that although other claims may be asserted, the proper claim is not design defect.
Cordrey will expand on this analysis in the July edition of MEALEY’S LITIGATION REPORT: LEAD. Meanwhile copies of this and all other litigation documents are available for a fee from MEALEY’S.

I had for a while held Sherwin Williams (SHW) shares and was encouraged when they were finally victorious in the Rhode Island litigation. But as housing continued its decline and the legal environment in other locals became more questionable, I sold my shares. Shares have held up very well considering the potential litigation risk (think asbestos). My assumption is that investors agree that the litigation on its face is a farce BUT, that does not mean that plaintiffs can’t win one here and there. Any win of any significance could lead to a cascade of private suits.

As State’s suffer extreme budget shortfalls, I would not be surprised if more suits are filed in a “lottery mentality”. AG’s have nothing to lose and everything to gain especially if they can force settlements. To this point paint makers have resisted and fought tooth and nail very successfully for the most part case by case.

Sherwin is clearly the class of the group from just an operational perspective. It is a great company with great management. The current legal environment for it, and others (think Altria) seems to be turning and not in a good way.

Other public companies usually involved in the suits would be NL Industries (NL) and DuPont (DD).

Disclosure (“none” means no position):None

Tags MO

Articles

Wells Fargo’s Interesting NPL Deal

Post author By ToddSullivan
Post date July 14, 2009

$.35 cents on the dollar it seems would be the price for these loans….

From National Mortgage News:

As the mortgage and banking industries debate whether the PPIP program will work and whether a similar effort over at the FDIC will ever see the light of day, Wells Fargo & Co. recently (and quietly) sold a $600 million portfolio of mostly non-performing subprime loans. Or so we’re told.

Late last week a source close to the transaction identified Arch Bay Capital of Irvine, Calif., as the winning bidder on the portfolio whose loans were originally funded by two mid-sized subprime wholesalers: Accredited Home Loans, and NovaStar Financial.

Arch Bay co-founder Steven Davis declined to comment on the purported sale to his firm, referring calls to his partner Shawn Miller who serves as Arch Bay’s CEO. Mr. Davis didn’t deny that the sale took place but he wouldn’t confirm it either. Mr. Miller could not be reached for comment.

Meanwhile, one question the sale raises is this: How exactly did the publicly traded Wells wind up with so many crummy non-prime loans from these once highflying firms? Answer: I don’t know and Wells isn’t talking. A company spokesman said the bank’s corporate policy is to not discuss its loan auctions.

Perhaps one reason the PPIP (Public-Private Investment Program) and the Federal Deposit Insurance Corp.’s ‘Legacy Loan’ sale initiative (involving whole loans, presumably residential and commercial mortgages) hasn’t caught fire is ‘sunshine,’ that is, the concept of disclosure. If bankers and investment bankers use these government programs that means all the messy details of their crappy investments might see the light of day, which could anger shareholders — and maybe even board members who might lean toward being “activists.”

The nice thing about the private non-performing loan market is that none of these messy details have to see the light of day, including the price paid. One banker told me that the 35 cents on the dollar that Arch Bay reportedly paid was twice what some hedge fund bidders were offering.

No matter how you do the math, Wells is going to take a nice hit on the sale, if it hasn’t done so already. Will the public ever get wind of the NPL sale price (outside this story)? That’s hard to say. The Securities and Exchange Commission requires that publicly traded companies disclose “material events” in their 10-Qs and Ks but when you have a mega bank the likes of Wells a $600 million loan auction might garner a sentence in the next earnings report, at best.

It is another reason to assume the PIPP program is not needed nor will it take off if private market deals are being worked out UNDER the radar rather than being exposed for all to see. I am guessing the banks do not want these prices exposed.

It also does bode well for the secondary markets if the log jam is starting to loosen and deals are getting done, albeit at a trickle. Any deal that gets done w/o the gov’t “help” is a real positive for everything.

Hopefully more of these deals will start happening….

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Disclosure (“none” means no position):Long WFC

Tags wfc

Articles

Wells Fargo's Interesting NPL Deal

Post author By ToddSullivan
Post date July 14, 2009

$.35 cents on the dollar it seems would be the price for these loans….

From National Mortgage News:

As the mortgage and banking industries debate whether the PPIP program will work and whether a similar effort over at the FDIC will ever see the light of day, Wells Fargo & Co. recently (and quietly) sold a $600 million portfolio of mostly non-performing subprime loans. Or so we’re told.

Late last week a source close to the transaction identified Arch Bay Capital of Irvine, Calif., as the winning bidder on the portfolio whose loans were originally funded by two mid-sized subprime wholesalers: Accredited Home Loans, and NovaStar Financial.

Arch Bay co-founder Steven Davis declined to comment on the purported sale to his firm, referring calls to his partner Shawn Miller who serves as Arch Bay’s CEO. Mr. Davis didn’t deny that the sale took place but he wouldn’t confirm it either. Mr. Miller could not be reached for comment.

Meanwhile, one question the sale raises is this: How exactly did the publicly traded Wells wind up with so many crummy non-prime loans from these once highflying firms? Answer: I don’t know and Wells isn’t talking. A company spokesman said the bank’s corporate policy is to not discuss its loan auctions.

Perhaps one reason the PPIP (Public-Private Investment Program) and the Federal Deposit Insurance Corp.’s ‘Legacy Loan’ sale initiative (involving whole loans, presumably residential and commercial mortgages) hasn’t caught fire is ‘sunshine,’ that is, the concept of disclosure. If bankers and investment bankers use these government programs that means all the messy details of their crappy investments might see the light of day, which could anger shareholders — and maybe even board members who might lean toward being “activists.”

The nice thing about the private non-performing loan market is that none of these messy details have to see the light of day, including the price paid. One banker told me that the 35 cents on the dollar that Arch Bay reportedly paid was twice what some hedge fund bidders were offering.

No matter how you do the math, Wells is going to take a nice hit on the sale, if it hasn’t done so already. Will the public ever get wind of the NPL sale price (outside this story)? That’s hard to say. The Securities and Exchange Commission requires that publicly traded companies disclose “material events” in their 10-Qs and Ks but when you have a mega bank the likes of Wells a $600 million loan auction might garner a sentence in the next earnings report, at best.

Hopefully more of these deals will start happening….

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Disclosure (“none” means no position):Long WFC

Tags wfc