Thread regarding Wells Fargo & Co. layoffs

Pointing to the section of annual report titled “Off-balance sheet exposure” as proof of on-balance sheet exposure, and data of column titled “Total VIE assets” as proof of WF assets. Brilliant!

What all of this points to is that you don’t understand the fundamentals of asset-backed finance.
What you are arguing is similar to me saying, “ok, I invested $20 in a the bonds of a $2 billion company; if the company goes belly up, I lose $2 billion.” That’s not how this works! By your logic, we alone bear the entire credit risk of every SPV or VIE we’ve ever dealt with in any capacity. Nope! These SPVs/VIEs do often have massive balance sheets. Sometimes we sell assets into them with limited recourse. Sometimes we service them. Sometimes we invest in slices of them. But nowhere do we own or have exposure to them as you suggest.

You cite the reps and warranties for VIEs/SPVs where we are a servicer (which are a subset). You do realize that credit losses are not breaches of reps and warranties, right? Nonperformance of the underlying assets alone (what you’re worried about) is not misrepresentation or breach of warranty, and we wouldn’t need to buy them back.

Perhaps that’s why, despite this information being disclosed to the investing public for ages, we haven’t been made insolvent already. It’s almost as though the market understands how this works and you don’t.

What if?

Somebody break this place up. We don’t deserve to be in business, especially the business of keeping people’s money safe and handling financial transactions. Wells Fargo should be covered on the show American Greed. We are the poster child for corporate greed. The American public is too busy to read and understand the full scope of the crimes, greed and mis-management at Wells, because it’s been broken up in to smaller stories spread over years. But spell it out A to Z and put it in one compact TV show or documentary? That would turn the light on to reveal a rotten-to -the-core corporate culture. We’ve got good people working in the ranks, absolutely, but we all have been conditioned to make decisions that are in the best interests of the bank, not our customers. Or to look the other way. Because we need our jobs. And we crave those atta-boys. Make a little change here to save Wells money but will produce less earnings for a client -done. Add a worthless service there to increase customer fees-done. Move jobs overseas to save Wells money even though it causes customer service issues for our customers- good job. Stand up for the ethical high road- you’ll be reminded you need to stay positive and get on the Stagecoach or lose your job.

And yes- it is all still happening today. Possibly to a higher degree. The public will look back at 2019/2020 and say: what was the Board of Director's thinking when they paid Charlie Scharf all that money to further destroy the bank? Once again the Board stood by and watched him hire all his friends for exorbitant salaries, run the bank in to the ground, outsource American jobs and then walked away. It’s the same story being played out with different characters and slight plot shifts from all the previous transformation stories. Historical transformation? You just wait and see.

And to all the detached employees who say “Well- it has to be done, dear, just look at those terrible numbers. It’s truly the only way.” I think you’re just fine with it as long as it’s somebody else and not you.

haha not op but I DO read the annual report, and on page 177 VIE off balance sheet "assets":
https://www08.wellsfargomedia.com/assets/pdf/about/investor-relations/annual-reports/2019-annual-report.pdf

At December 31, 2019 and 2018, the table includes total loans of $1.0 trillion and $1.1 trillion, delinquent loans of $5.2 billion and $6.4 billion, and foreclosed assets of $251 million and $442 million, respectively, for FNMA, FHLMC and GNMA.

Sounds like a troll who cant read an annual report....no wonder you keep losing money.....

Heres the kicker troll'y -
"For loans sold or securitized where servicing is our only form of continuing involvement,
WE WOULD ONLY EXPERIENCE A LOSS IF WE WERE REQUIRED TO REPURCHASE DELIQUENT LOAN OR FORECLOSED ASSET
due to a breach in representations and warranties associated with our loan sale or servicing contracts."

What that means is as net losses on this big stack of sht goes up& up if the borrower becomes insolvent, the bank either pays high fees to the holder for giving the debt holder a big pile of unflushed troll poo, or the bank has to buy them back and take actual losses.

As one New York appellate court observed: A loan “need not be in default to trigger the obligation to repurchase it.”[5] Thus, a CMBS trust has a viable repurchase claim when a breach increases the risk of loss, even if that risk never actualizes.

This has been tested in court and the cmbs originator has always lost, which in this case is this bank.

Either way wells is super fuuuked if insolvency begins increasing, say, because of a pandemic?

Troll is a bag holder - ouchie ouch

Wells doesnt have enough employees to lay off to make up for a few hundred billion shortfall in troll like smelly bad deals.

If you wanna see what all this means go watch the Big Short. This is the same thing, only MASSIVELY BIGGER!

Consider yerself schooled son.

If you judge wells vs other banks in 2009, it did much better. Their loan portfolio is pretty similar to 2009, although they are much better capitalized at this point. Their main issues vs other banks are the asset cap, and inefficiencies.

Lol we have nowhere near a trillion dollars in VIEs. Look at our latest annual report.

You do realize that the vast majority of WF's VIEs are available-for-sale securities, which means we've already eaten their losses in OCI? And that all of this is public and you're not seeing hedgies short us into nothinginess?

There's plenty to be worried about but this is fiction.

Too big to fail. The bank will outlive us all .

Wells will not become insolvent. Don't be absurd.

https://www.bloomberg.com/news/articles/2017-04-24/wells-fargo-s-third-time-a-charm-as-it-clears-living-will-hurdle

I remember this - wasnt wells the only bank that took 3x to draft before the fed would accept it?

Living will and FDIC

We have a resiliency plan which includes what would happen in a number of scenarios including if we became insolvent; had to be broken up etc. all banks of our size are required to have these plans in place.

You make it sound like you have a choice of package options.

I doubt the bank will fail, that means will aid in bringing down entire country; I think you should hope it doesn't. Feds wont let it fail for many reasons, not just this bank but also the other large ones.

Thats why I am taking the first package they offer.

If you work hard and try to stay on and survive a few rounds of layoffs, if the bank fails, you lose your job and no severance package.

Better to be first.

I know where all the dead bodies are buried.

Ya, pay me now and am taking the first life raft away from this sinking ship.