So, just when we thought chicken-little was still crowing, Wells Fargo scoops up ALL of Wachovia from the palm of Citigroup. In my view, this deal is a critical turning point. It’s a turning point primarily because it’s a view by a well regarded, well respected management team that the value of the WB franchise was more than perceived by a competitor, without government assistance. With this offer, WFC set a floor for those assets, which is above what the prior bid was and this is important, as until now, the direction of pricing was south NOT north.

An intriguing point to note within this deal structure is that Berkshire is the largest shareholder of Wells Fargo.  Mr. Buffett, a re-known value buyer has gotten knee-deep in financials over the last few weeks.  Most recently Goldman Sachs raised $10B, $5B in perpetual preferred to Berkshire with a 10% dividend and an …

I firmly believe it is time for the business leaders, the entrepreneurs, the visionaries to take back the reigns of their companies’ from the accountants!  For as long as I can remember, business leaders have pursued long term goals, laid out 3-5 year business plans for their respective Board’s of Directors and at times, cursed the scrutiny of “going public” primarily because it forced them to think and more importantly, act on a short term, that is, quarterly basis.  I’ll save the woes of being a public company for another time.  Many CEO’s are likely looking back to those time as “the good ‘ole days.”

This week I was struck by the awareness of the CNBC commentators as they realized through an interview with a sells-side analyst that the financial institutions’ management teams had accounting limitations placed upon them as to what and when they could or could not write-down assets!  Now, perhaps …

I have had a number of recent conversations with bankers regarding quarter-end asset valuations related to “Other Than Temporarily Impaired” asset concerns. Auditors are once again leaning on banks to aggressively recognize impairment charges on a host of financial assets held in portfolio.

I want to put into perspective the credit markets as related to asset valuations and historical cycles. My theory is that financial assets in the portfolio are not impaired permanently, only temporarily. I offer a 20-year history of swap spreads as evidence. Swap spreads are used as a proxy for all credit spreads, particularly for financial companies, as most bank funding rates, including FHLB advances, are based on swap spreads. The chart below this article (source: Bloomberg) shows the history of swap spreads since November 1988, a period covering almost 20 years. During this time there have been three distinct periods of distress in credit markets, including the …

There is plenty of blame to go around to many different segments and players in those segments that has gotten us to the near crisis state in which we now find ourselves.

I, for one, applaud the Fed and the Treasury department for the quick and decisive actions they are now taking and took over the last week.  They helped avoid massive chaos in world wide financial markets.  Opening the Federal Reserve discount window to the dealers was a good idea (obviously a little late for Bear Stearns) but I should expect and maybe even demand added regulation and oversight to follow for those new recipients of this privilege.

I hear a lot of talk about what now needs to be done and that is good.  We certainly need to find a way to help get the retail real estate market pricing stabilized and can expect a number of old and new ideas and proposals …