This is a great time to be in banking – Warren Buffett – 3 Billion in earnings for Q1 2009

[CAwireman]

People like Warren Buffett and a number of the regular posters on this board have better financial minds than I’ll ever have. But, this one was a bit of a surprise. Didn’t think we’d see banks reporting positive news for some time…

From the article, I gather its due largely to refinancing available at historically low rates, and a surge in purchaes of fire-sale priced homes, again at historically low rates.

Way to go Warren way to go.

http://www.cnbc.com/id/30137024

If you were listening carefully to Warren Buffett on CNBC one month ago today, you heard him say, “This is a great time to be in banking.”

It may not have made sense to you then, but it should today.

Wells Fargo shares soared 31.7 percent today (Thursday) after the bank announced before the opening bell that it expects to report a record $3 billion in earnings for its first quarter.

In a news release, Wells said, “Business momentum in the quarter reflected strength in our traditional banking businesses, strong capital markets activities, and exceptionally strong mortgage banking results.”

At the closing bell, the stock was up $4.72 to $19.61 a share.

As of the end of December, Buffett’s Berkshire Hathaway owned almost seven percent of Wells Fargo’s stock. That’s over 290 million shares. (It may have bought, or sold, shares since then.) It’s the single biggest shareholder.

During a three-hour live appearance on Squawk Box that same morning, Buffett talked about how banks could take advantage of the low cost of money to make very profitable loans:

“The spreads have never been wider. This is a great time to be in banking, you know, if you just get past the past and they are getting past the past. I mean, right now every time a loan is made to somebody to buy a house–and we’re making, you know, making millions of loans–four and a half million houses will change hands this year out of a total stock of less than 80 million. So those people are making good mortgages. You want those assets on your books and you get a great spread in putting them on now. So it’s a great time to be in banking, but you do have to get past this past.”

Today, Berkshire’s stake in Wells Fargo is worth $3.2 billion more than it was when Buffett spoke those words.

[Coronita]

If you took the gamble and bought citibank stock at $1 a few months ago when everyone thought it was going under, with today’s closing prices, you would have been up 200% 🙂 (for now, at least, until shittybank announces “earnings”).

[Coronita]

If you took the gamble and bought citibank stock at $1 a few months ago when everyone thought it was going under, with today’s closing prices, you would have been up 200% 🙂 (for now, at least, until shittybank announces “earnings”).

[Coronita]

If you took the gamble and bought citibank stock at $1 a few months ago when everyone thought it was going under, with today’s closing prices, you would have been up 200% 🙂 (for now, at least, until shittybank announces “earnings”).

[Coronita]

If you took the gamble and bought citibank stock at $1 a few months ago when everyone thought it was going under, with today’s closing prices, you would have been up 200% 🙂 (for now, at least, until shittybank announces “earnings”).

[Coronita]

If you took the gamble and bought citibank stock at $1 a few months ago when everyone thought it was going under, with today’s closing prices, you would have been up 200% 🙂 (for now, at least, until shittybank announces “earnings”).

[BGinRB]

So WFC is keeping 4.5% yielding loans on their books? Suuuure. And HELOC’s as Ln, where n>=3.

[BGinRB]

So WFC is keeping 4.5% yielding loans on their books? Suuuure. And HELOC’s as Ln, where n>=3.

[BGinRB]

So WFC is keeping 4.5% yielding loans on their books? Suuuure. And HELOC’s as Ln, where n>=3.

[BGinRB]

So WFC is keeping 4.5% yielding loans on their books? Suuuure. And HELOC’s as Ln, where n>=3.

[BGinRB]

So WFC is keeping 4.5% yielding loans on their books? Suuuure. And HELOC’s as Ln, where n>=3.

[Navydoc]

Is it me, or doesn’t it seem particularly suspicious that Wells Fargo is reporting high earnings immediately after Mark-to-Market was suspended? I’m certainly not a financial wizard, but this sure smells like smoke and mirrors to me. Didn’t WFC buy up all of Wachoia’s crap mortgages?

I just realized that I think my car has appreciated 2 million dollars this year. Congratulate me, I’m a millionaire! I wonder if I can declare that as an asset on my mortgage application?

[Navydoc]

Is it me, or doesn’t it seem particularly suspicious that Wells Fargo is reporting high earnings immediately after Mark-to-Market was suspended? I’m certainly not a financial wizard, but this sure smells like smoke and mirrors to me. Didn’t WFC buy up all of Wachoia’s crap mortgages?

I just realized that I think my car has appreciated 2 million dollars this year. Congratulate me, I’m a millionaire! I wonder if I can declare that as an asset on my mortgage application?

[Navydoc]

Is it me, or doesn’t it seem particularly suspicious that Wells Fargo is reporting high earnings immediately after Mark-to-Market was suspended? I’m certainly not a financial wizard, but this sure smells like smoke and mirrors to me. Didn’t WFC buy up all of Wachoia’s crap mortgages?

I just realized that I think my car has appreciated 2 million dollars this year. Congratulate me, I’m a millionaire! I wonder if I can declare that as an asset on my mortgage application?

[Navydoc]

Is it me, or doesn’t it seem particularly suspicious that Wells Fargo is reporting high earnings immediately after Mark-to-Market was suspended? I’m certainly not a financial wizard, but this sure smells like smoke and mirrors to me. Didn’t WFC buy up all of Wachoia’s crap mortgages?

I just realized that I think my car has appreciated 2 million dollars this year. Congratulate me, I’m a millionaire! I wonder if I can declare that as an asset on my mortgage application?

[Author]

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