Some of you have may have noticed the ongoing debate regarding the Pick-a-Pay portfolio of Warren Buffett’s beloved Wells Fargo (NYSE: WFC). In order to put this horse to pasture, I present the following with no pejorative words and only a few minor comments.
Worse than too-quick, unsatisfying sex
Last Friday the Obama Administration and the Department of Treasury released their long awaited and overdue plan for housing reform. They delivered a whole lot of nothing: No plan, No future of mortgage secondary market, No future mortgage buyer of last resort, and No substance. The kids at the Department of Treasury must have written this paper during their senior economics policy class at their Ivy League school. (At my alma mater they would have received a mid “C” for this crap if the professor were in a generous mood.)
What, exactly, would cause a highly paid executive to abruptly quit his job? The executive in question is Howard Atkins, former CFO of Wells Fargo (NYSE: WFC). In 2009, Mr. Atkins’ total compensation was $11.6 million. That was up from $4.9 million in 2009 and $5.7 million 2007 – that’s not bad living by any standard. It’s no secret that I have often been critical of WFC and their financial reporting. It’s not that I have a vendetta against the company – as a New Yorker, I don’t run across them in my every day life. I don’t own the company’s stock or options nor do I have a short position. So, why do I continue to shine a light on the company? Quite frankly, I believe the company does not receive the same level of scrutiny that its peers receive. I believe this is likely due to the fact that Berkshire Hathaway (NYSE: BRK.A) is their largest shareholder. As many of you know, investment banking is driven largely by fees received from capital raising and Mergers & Acquisitions. Buffett’s empire of portfolio companies crosses numerous sectors. Those companies, from time to time, find it necessary to utilize the services investment banks. Those services typically result in hefty fees. Why upset uncle Warren? Just a thought, but I like conspiracy theories. Continue reading