Spinning that Wheel For Wells Fargo

The following passage from FinancialSense market commentator, Chris Puplava, highlights the spin put on Wells Fargo.

• One of the main problems with the financial media is selective reporting of information where the ugly details of economic and company data are blatantly ignored while their emphasis is primarily, if not entirely, on the positive details. This is exactly what we saw last Wednesday (07/16/08) with the earnings release by Wells Fargo that propelled the stock northward by 33% at one point, and also boosted the financial sector to see one of their biggest daily rallies in more than a decade. The media emphasized two points on the Wells Fargo earnings report, which were an earnings surprise and a 10% dividend increase, while ignoring two glaringly negative tidbits.
  
  The financial media reported that Wells beat earnings but they did not say HOW the company beat analyst estimates. Wells Fargo earned $1.8 billion in the last quarter beating analysts polled by Thomson Financial who expected earnings of $1.6 billion. The media conveniently left out that the company changed their policy of writing off home equity loans where payments were more than 180 days late, rather than 120, thus deferring $265 million in charge-offs. Subtracting the $265 million from the company’s earnings would have led to earnings of $1.535 billion, or 4.1% BELOW analyst estimates. Second, the company quadrupled its provision for loan losses, another tidbit that was conveniently left out on many CNBC segments commenting on the company’s earnings.
  
  Make no mistake, things are not improving for either the economy or financial markets as the credit crisis and housing depression move up the food chain as evidenced by American Express’ earnings report this week (emphasis added).
  
  American Express reports 38% drop in net income
  Market Watch, 07/21/08
  
  American Express reported a 38% drop in second-quarter earnings Monday and warned that it won't be able to meet long-term financial targets until the economy improves.
  
  The credit card company said that even its most creditworthy, long-standing customers felt the effects of the economic slowdown that's currently sweeping the U.S…
  
  "With bad debt occurring even in the superprime card segment, AmEx's earnings clearly show that the credit crisis is going upscale, which does not bode well for the U.S. economy," Red Gillen, a senior analyst at consulting firm Celent, commented via an email exchange…
  
  The environment has weakened significantly since then, particularly during the month of June," Chenault (CEO) added…

Read the rest of the brilliant write-up here: Banking on Foolishness: Financial Spinsters At It Again