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Rolfe Winkler: Wells farrago

As for its capital position, while it’s good news that tangible common equity increased this quarter — to 4.7 percent from 4 percent — that still doesn’t account for off-balance sheet exposure, which in Wells’ case is north of $1 trillion, according to their last quarterly filing with the SEC.

Banks are supposed to account for this exposure beginning next year. Wells says it is bringing only $28 billion of “risk-weighted” assets back onto its balance sheet. Chris Whalen of Institutional Risk Analytics is concerned: “The economic reality is they’re on the hook to cure defaults and other problems on most of those structures.”

How they get to $28 billion, he doesn’t know, and since the company doesn’t do a regular conference call with investors allowing for questions, we’ll have to wait for the company’s next 10-Q filing to understand why.

Minyanville: Where the Housing Market Goes From Here

They are a cheap on a book value basis, but those books have been getting whittled away as they report losses.

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