Wells Fargo predicts 3 BILLION$ profit

[Holmes]

NEW YORK (CNNMoney.com) -- Wells Fargo said Thursday it expected to book a profit of approximately $3 billion in the most recent quarter, exceeding Wall Street expectations.

Wells Fargo (WFC, Fortune 500) shares soared on the news, climbing 20% in pre-market trading.

Originally slated to deliver its results later this month, the San Francisco-based banking giant issued guidance for the first quarter, saying it expected to report net income of about $3 billion, or 55 cents per common share.

That is well ahead of analysts' consensus estimates for a profit of 28 cents a share, according to Thomson Reuters.

Wells Fargo attributed the latest results to strong performance in its traditional banking and mortgage businesses.

Should we believe this?

[Lunar]

Well, there's a reason I bank wit 'dem

[Sam Spade]

Wells Fargo is notorious for cooking their books more than any other bank in the profession (along with most other companies in general).  Be cautious.

I do like the *timing* - day before a three-day weekend before options expiration week when trading is usually light.  Nice short squeeze.

[Lunar]

and then there's that stress test and whatnot

but they were a little less involved in the subprime stuff, at least that's how I understand it.   But that could be balanced out by actually buying Wachovia

[Sam Spade]

and then there's that stress test and whatnot

The stress test is a joke.

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They have plenty of junk on their books - Wells Fargo's HELOC exposure is generally worse than anyone else.  Perhaps they aren't as bad as Citi and BoA, but they're still going to be garbage in the long run, IMHO.  I'm just saying that you have to watch out with Wells - they play accounting games to the hilt.

Wachovia is crap.  Probably worse than Wells was.  Their addition helps nothing and makes the whole bank crappier. 

One other general "bank" thing:  As I have said before, I would be generally cautious as to bank 1st quarter reporting, because I expect all of them to do better than expected.  There are a number of "one-time" reasons (i.e. technical adjustments that will only occur this quarter), but there are a lot of real reasons too.  One of them is that they're looting the consumer for one last time (with the help of our government) through credit spreads.

Anyway, back to your normal programming.