PiLfan Posted April 9, 2009 Share Posted April 9, 2009 Wells Fargo Co. said Thursday that it expects record first-quarter earnings of $3 billion, easily surpassing analysts' estimates and providing an encouraging sign for corporate profits. Wells Fargo is the first bank to provide a forecast for first-quarter results, and the unexpectedly upbeat news gave an immediate boost to stock futures. Several pessimistic forecasts about potential loan losses have jolted the market in recent days, and investors have been anxious as Citigroup Inc., Goldman Sachs Group Inc. and JPMorgan Chase & Co. all report next week. http://www.washingtonpost.com/wp-dyn/content/article/2009/04/09/AR2009040901312.html?hpid=topnews The WP is also reporting that new jobless claims fell more than expected. Also, sales in the retail industry showed signs of stabilizing in Feb and March and the trade deficit declines as demand for exports increase overseas (but also to slumping demand for imports). ...maybe the world's not coming to an end? :paranoid: Link to comment Share on other sites More sharing options...
The 12th Commandment Posted April 9, 2009 Share Posted April 9, 2009 Shortest economic catastrophy E VER! I hope. lol Link to comment Share on other sites More sharing options...
Hubbs Posted April 9, 2009 Share Posted April 9, 2009 I'd want to see exactly how much of that profit is coming from the Treasury handing the big banks huge bags full of money. Link to comment Share on other sites More sharing options...
BurntToast Posted April 9, 2009 Share Posted April 9, 2009 Wells Fargo received 25 Billion in TARP funds a few months ago. Does this mean they really lost 22 billion? Link to comment Share on other sites More sharing options...
Madison Redskin Posted April 9, 2009 Share Posted April 9, 2009 Wells Fargo received 25 Billion in TARP funds a few months ago. Does this mean they really lost 22 billion? I don't believe that funds derived from loans constitute income under GAAP and, as a result, the TARP monies would not affect their profits/losses. Link to comment Share on other sites More sharing options...
Tonic24k Posted April 9, 2009 Share Posted April 9, 2009 It's more than likely due to this... http://www.meltingpotproject.com/mpp/2009/03/closer-and-closer-to-outright-thievery.html It seems like those **** politicians are using are tax dollars to subsidize bank profits. Gotta love corruption... Link to comment Share on other sites More sharing options...
TheGoodBits Posted April 9, 2009 Share Posted April 9, 2009 What's this??? The words "record" and "profit" used in the same sentence, and side-by-side at that? I don't understand!!! Thank you Obama! Link to comment Share on other sites More sharing options...
PiLfan Posted April 9, 2009 Author Share Posted April 9, 2009 I don't believe that funds derived from loans constitute income under GAAP and, as a result, the TARP monies would not affect their profits/losses. yeah, that's what most rational minded accountants would think, but apparently they may be classified as "permanent equity" on the balance sheet. not sure if i agree with that one. http://fincriadvisor.com/2009-03-30/TARPaudits Banks that have accepted TARP funds may be in for a big and unpleasant surprise when they go through their next external financial audit. The reason: TARP should not be classified as a liability, even though the gut instinct of nearly every CPA would be to do so. Wait a second: The bank essentially has received a government loan, which is a liability, right? Wrong, according to James Kroeker, Deputy Chief Accountant at the SEC, in an opinion letter to Treasury signed also by Russell Golden, Technical Director at the Financial Accounting Standards Board (FASB). However, Kroeker was not definitive in his response, stating that he "would not object if the [TARP] Warrants ... were to be classified as permanent equity under applicable U.S. GAAP." He even hedged on the need for shareholder approval, noting that it's necessary... or not, as long as "the issuer takes the necessary action to secure sufficient approvals prior to the end of the fiscal quarter in which such Warrants are issued." Consider what TARP funds actually are: special issues of preferred stock (5% dividend, rising to 9% after five years) bundled with warrants that function like call options. In other words, TARP is "debt with an equity skin around it," writes accountant Jack Ciesielski, publisher of the Analyst's Accounting Observer and the AAO weblog. It should be classified as a liability, such as subordinated unsecured demand debt. Treasury is a lender, not an investor, he says. Does the SEC's opinion that it "would not object" to the equity interpretation mean that a bank also could classify TARP as a liability without issue from SEC, FASB or an independent CPA? "From a strictly semantic point of view, I suppose that a bank could call it a liability on that basis," Ciesielski says. "I don't think that there will be a bank in the country that would do so, given the SEC's statement, however." What was SEC and FASB thinking? The idea is that the TARP warrants are "permanent" equity because the bank can't issue additional shares. It only can redeem the equity from Treasury. Thus, the correct thing to do is classify it as equity - equity that can't be redeemed for at least three years, has no voting rights and restricts dividends on junior preferred stock or common stock. Link to comment Share on other sites More sharing options...
Tonic24k Posted April 9, 2009 Share Posted April 9, 2009 What's this??? The words "record" and "profit" used in the same sentence, and side-by-side at that? I don't understand!!!Thank you Obama! The world has enough lemmings...:doh: Link to comment Share on other sites More sharing options...
Redskins Diehard Posted April 9, 2009 Share Posted April 9, 2009 Record Profits? We better come up with a special tax for them. We don't want companies making record profits...I'll bet you some people are even getting rich off of these record profits Link to comment Share on other sites More sharing options...
FanboyOf91 Posted April 9, 2009 Share Posted April 9, 2009 Faz 100 apr 09 15 put ftw Link to comment Share on other sites More sharing options...
TheGoodBits Posted April 9, 2009 Share Posted April 9, 2009 The world has enough lemmings...:doh: lol ok Link to comment Share on other sites More sharing options...
haithman Posted April 10, 2009 Share Posted April 10, 2009 Faz 100 apr 09 15 put ftw nice play there Link to comment Share on other sites More sharing options...
ChocolateCitySkin Posted April 10, 2009 Share Posted April 10, 2009 no rule no posting links to meltingpotproject please!!!!!!!!!!! no one clicks the links and no one cares its just spam. Link to comment Share on other sites More sharing options...
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