Best banks in the country, different then money center banks you think
of. Banking as a whole, profitability will be considerably less in the
years ahead then it was early part of this century. A real important
reason is the leverage will reduces which is good society. The
leverage could be used but because when used unintelligently as you
can see in TBTF ruins it for everyone. Even if ROA was as high there
will be less assets so returns will be lower. We still think USB and
WF are still good business, not as attractive as when leverage was
higher. Troubles in banking, you have seen worst in the past, banking
is fundamental. Stubbs, I dont know why we think of new ways to lose
money when they old ones were working so well. The FDIC has had to
handle 3800 institutions, that has not cost US taxpayer a penny, its a
mutual insurance company. it always happens on the asset side, they
always mess up. I like those positions, I added to WF. 25-30% on
tangible equity will not be future.
CM - M&T bank is headed by a real sensible fellow and its been a
wonderful investment, written by Bob Romers Annual report and I
recommend it as reading and Jaime Diamonds at JP Morgan. Wilmer
doesn't like banks making money on trading because you are making
money on your clients.
WB - romer also dislikes money tends to flow where people work on
money and brain drain is a problem
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