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IBDvalueinvestin (98.60)

Mark to Market change causes Spike in WFC Profit, So who's next



April 09, 2009 – Comments (6) | RELATED TICKERS: WFC , HIG , MET

in line to profit big in the 1st qtr on Mark to market change? I believe we are going to be shocked at the profits from Insurance companies due to mark to market change. HIG, MET, MFC, Watch these companies surprise short interest with an upside guidance just like WFC. Insurance sector was one of the sectors that got completely slammed due to Mark to market rules. Now that the rules have been relaxed watch the writeoff's of the past dissappear and ratings agencies start upgrading the sector.

6 Comments – Post Your Own

#1) On April 09, 2009 at 10:04 AM, wolfhounds (41.61) wrote:

Yes indeed, but in the end all chickens come home to roost. Continued write offs, M to M or not, aren't going away.

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#2) On April 09, 2009 at 10:19 AM, EHoyle80 (< 20) wrote:

Can the “easing” of the mark-to-market accounting rule really have contributed to higher stock market prices? If so, this is “truly ludicrous,” says the Stock Research Portal. Why? “It is after-tax discretionary cash flow that dictates value in the end. This is something that not all stock analysts seem to focus on. If they did, accounting changes that simply enable manipulation of numbers would be disregarded by Wall Street.”

Via Stock Research Portal 

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#3) On April 09, 2009 at 10:25 AM, rd80 (96.60) wrote:

Recommend reading the press release

Mark-to-market changes had nothing to do with revenue growth, strong operating margins and a 64% increase in mortgage applications.

The write-offs from the past haven't disappeared, at least not yet.  The quarter has $3.3 billion of write-offs and a $1.3 billion increase in loss reserves.

Next quarter is when you can expect the mark-to-market  changes to show up in the balance sheets.

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#4) On April 09, 2009 at 10:54 AM, FreundInvesting (28.76) wrote:


Unfortunately, you're wrong. Geithner's plan is to transfer the bad assets to the taxpayer. No more writeoffs in the future, my friend.

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#5) On April 09, 2009 at 11:01 AM, wolfhounds (41.61) wrote:

I'm not talking about toxic assets. The institutions supposedly have identified those. Credit cards, letters of credit, real estate loans, commercial loans have been sitting on banks books at far higher values than their true worth. Many banks aren't calling in over due debt of REITs. There are only so many fingers the fed can out in the dyke.

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#6) On April 09, 2009 at 11:24 AM, bigpeach (28.33) wrote:

The release doesn't mention write downs at all, this statement is pre write down. It does mention charge offs, and it sounds like some people think these are the same. Charge offs are taken on direct loans made to consumers that the bank no longer expects to collect. An example would be a home owner 90 days past due, and expecting to default. Write downs are marking a security's price to market price, regardless of the expected cash flow from that security. Very different concept, and we'll see when they release earnings how much they've taken in write downs.

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