JP Morgan's Annual Shareholder Letter

I don't know how I missed this. Jamie Dimon lays out a summary of the banking crisis so well, his letter should be required reading for all investors and business students:

http://investor.shareholder.com/jpmorganchase/annual.cfm

From page 23: We believe our nation can and should be able to provide health care coverage for all. It is the right thing to do, it will help us build a stronger nation, and, if done properly and efficiently, we believe it ultimately will be cheaper than the current course we are on.

I love the fact that Dimon is for subsidized health care coverage. Almost anything seems better than our current system, which has created massive future entitlements while failing to cover millions of Americans.

Let's not forget--according to most reports, Sandy Weill, the former CEO of the now-disgraced Citigroup, didn't get along with Jamie Dimon. Mr. Dimon should be quite happy how things have turned out.

More on how to avoid another banking crisis here.

My Facebook Debate on Torture

Here is an ongoing debate about torture I'm having on Facebook. Tom is from Dallas, Texas, the state that elected George W. Bush several times. Sean has an advanced physics degree and works for a government lab. I don't know Evan.

Sean: Mr. Obama claims the enhanced interrogation techniques are a "recruitment tool that Al Qaeda . . . used to try to demonize the United States and justify the killing of civilians." However, the 1993 World Trade Center bombing, the Khobar Towers bombing, the African Embassy bombings, the Cole, and 9/11 all happened before George W. Bush waterboarded Khalid Sheikh Mohammed, Abu Zubayda, or Abd al-Rahim Al Hashiri.

Evan: What an amazing perspective. So, you're trying to say that chronology matters when discussing these issues? Hmmm.... Bold. Very bold.

Me: The fact that some terrorists were anti-American years before 9/11 does not preclude the idea that our inhumane conduct towards prisoners increased the size and the intensity of terrorist threats. Look at it this way:

1. I've hated apples since 2001.
2. Yesterday, an apple truck dumped applesauce all over my lawn, causing me to pay 100 dollars to clean it up.
3. Now, I hate apples even more, and thanks to the apple company's negligence, it's easier for my neighbors to see why I hate apples, and also harder for pro-apple people to defend their product.

Under your theory, you would argue the apple company's negligence had no impact whatsoever on sentiment, credibility, and the safety of the next apple truck. Common sense tells us otherwise. And you're not seriously arguing that Abu Ghraib had no impact whatsoever on anti-Americanism and the terrorists' ability to influence more recruits, are you?

Evan: I would ask you, what did you do to Apple farmers to get the truck dumped all over your lawn? Did you, you know, go kill an apple farmer's whole family? Burn down his house? If you did neither, than your analogy falls apart. If you did either, or something similarly horrific, either your neighbors will see why it happened or are likely to also share your hatred and support your horrific acts.

I mean... seriously, neither 9/11 nor any of the actions and policies taken against Muslim extremists were accidents. But, one was first. And, actually, saying 9/11 was first is not even correct, as pointed by Sean in the original comment.

These extremists are not rational, either. So, using standard analogies on them is really fruitless as well. It just doesn't hold up. Next thing I bet we hear is the people who went after the financial funding of the terrorist orgs will be prosecuted, because the terrorists have kids too and those kids are hungry and the UN doesn't want kids being hungry.

Tom: Suppose you know the apples are coming for your lawn again. You have a senior apple in custody at a time when apple chatter is similar to the apple chatter that preceded the last major lawn event. You have reason to believe the senior apple has information that will save lawns. Shouldn't you squeeze that information out of the senior apple, if it is the best you can get and it will save lawns?

Me: Some radicals think they have plenty of support for a "blowback" theory--the overthrow of the Shah, support for Afghanistan fighters during the Cold War, "bribe" money to Egypt, Jordan, and Israel, etc.--but I wasn't referring to a "blowback" theory. Anyone can point to an event at a certain point in time and use it to further his or her agenda. Intelligent people look beyond chronology to determine whether an action or response makes sense.

Torture (squeezing the apple) has not been shown to produce viable information. The FBI has already said this (see Ali Soufan). Thus, if you are pro-"squeezing the apple," you're going against the current U.S. administration, the FBI, and the U.N.--in other words, you're on the fringe, b/c credible people with more information than you are telling you torture doesn't work.

http://www.nytimes.com/2009/04/23/opinion/23soufan.html

Me: Oops, meant overthrow of Mohammad Mosaddeq, not the Shah (see "Operation Ajax"). Anyway, on a separate note, check out the story of Iran Air Flight 655. Neither example is necessarily relevant to 9/11, b/c the 9/11 attacks were caused mainly by Saudi/German residents.

http://www.history.com/content/militaryblunders/iran-air-shot-down

Tom: Thanks for pointing out what intelligent people do and think. It is beyond consideration that anyone who disagrees with you might also be intelligent. Please pass the word that anyone who plans to think a thought should pass it by you before wrapping themselves in the mantle of intellect. Thank you, great one. Please continue to protect us from ourselves.

Sean: I don't believe for one moment that even a single Al Qaeda recruit ever decided on news of waterboarding at Guantanamo to pack his bags and head for the nearest training camp. They have a preexisting proclivity to hate us. They despise the United States for our culture and envy us for our power. The United States is a constant reproach to them: We are rich to their poor, strong to their weak, vigorous to their idle, can-do to their sit-and-wait. If we were weak, we would not be hated. If we were poor, we would not be hated.

Furthermore, this notion that the enhanced interrogation techniques applied to Khalid Sheikh Mohammed, Abu Zubayda, or Abd al-Rahim Al Hashiri didn't produce actionable intelligence and foil plots to kill Americans is a shibboleth of the left.

Did anyone else notice the Mr. Obama failed to rebut Mr. Cheney's point about what the enhanced interrogations yielded? All indications are that they were spectacularly successful.

Now that he has declassified and released details of the enhanced interrogations themselves, Mr. Obama should declassify and release the results of those same interrogations so we can all judge for ourselves whether or not they are worthwhile.

Tom: Furthermore, assuming Khalid Sheikh Mohammed was water boarded 183 times (as erroneously and repeatedly reported; there were up to 183 'pours' that occurred in about 20 sessions) I have a hard time finding a problem with it. If the first instance was the only fruitful one, and the rest were for sport, he was still a planner of the 9/11 attacks. I don't care if he was gang raped by giraffes 183 times. Don't try to mess up my cities.

Evan: The 'aggressive interrogation is not proven to get accurate information' is a tough pill to swallow. Interrogation is, really, an art, not a protocol. It is an extremely personal and emotional task, something that is difficult to actually study. And, when you mix in the counterintelligence that Bin Laden's followers have been trained to deploy, and it gets very murky. Show me a sample group for that study that matches up well to the Jihadists that we're up against. I'm going to guess that the 'aggressive interrogation doesn't work' data comes from po-dunk cops that went overboard. Our guys trying to get info to save our country from Jihad are so far beyond your everyday cop.

Also, remember, there are journalists who have volunteered to be waterboarded. They probably saw video of it and figured "wow... that's mean, but I could handle it"... you don't see journalists volunteering to have their eyes poked out or legs broken, repeatedly. Waterboarding is different.

Me: A couple of quick points--first, chronology itself is not meaningful without studying the actual details of the events themselves. For example, if I kicked you ten years ago, it may have nothing or everything to do with whether you kick me fifteen years later. More information is necessary to determine the relevance, if any, of the events, especially when reviewing events that occurred years apart. [i.e.,] Details of events themselves are necessary to determine the relevance of the dates of the events. This statement seems so clear, it is surprising anyone even tried to refute it. Tom, I notice you attacked me personally on the issue of chronology and didn't address the actual points I made regarding the actual issue--and no else did, either. Tom, I make no comment regarding your intelligence--your own failure to address the actual content of my statement speaks for itself.

Let's move on to Evan and Sean. First, I agree with Sean that the American people should be able to review the results of the interrogations at some point, hopefully soon. But Sean, your next statement--"All indications are that they were spectacularly successful"--is based on speculation. No one here knows whether the interrogations were successful or unsuccessful because we don't have evidence. We do know, however, that an FBI agent and our administration have told us torture does not yield good information, and the administration has access to the interrogation results. I also notice that no one commented on the NY Times article I linked to.

Evan, you make an excellent point; however, other countries have used torture against terrorists for years--just look at Egypt, Syria, and Israel. These countries haven't published/disclosed results of their interrogations. Without evidence, we cannot speculate. There is a reason speculation is inadmissible in a U.S. court of law. I agree that interrogation is an inexact science. But what we've done--waterboarding, dogs, insects, stripping, etc.--seems designed more to humiliate than to get information. That makes no sense to me. I want good information, and most interrogation experts agree torture doesn't work. Threatening torture against a weak, disconnected individual might produce some information--but there are miles between a threat and the actual torture itself. Here's a good article on interrogation--note the absence of waterboarding, insects, etc:

http://www.theatlantic.com/doc/200310/bowden

There is a diff btw torture and coercion. Where do we draw the line?

Sean: I'm pretty sure the line is drawn between what Syria, Iran, Saddam's Iraq and Egypt do and what we do. I think that's one way to tell the difference between torture and intense interrogation.

Tom: It was not a personal attack to simply note your arrogance. I didn't comment on chronology, as you seem to be arguing a specific point that is both simplistic and inconsistent with the original point of the status. Chronology is important. No claim was made that nothing else was important. Therefore, strenuous arguments about how chronology is not the only thing to consider are largely irrelevant. Consequently, my disregard was mistaken for the absence of a meaningful response.

Evan: I say +1 with Tom... And, about the FBI agent and the administration. The FBI is always straightforward, and the Administration, this administration, is obviously straightforward on everything. That's why the whole administration spent the day covering the disaster that is Biden's mouth... Yeah, that administration. I think there is proof that the... Read More interrogations were successful in the fact that we haven't been attacked since 9/11, even though we've been 'provoking' people to do just that with our 'horrible foreign policy' (I use quotes because I believe provoking is actually preventing, and 'horrible foreign policy' is actually a strong foreign policy) Once again, the chronology seems to add up.

Me: The American people have voted against Bush and the very policies you support. I am just sad it took eight years and an economic collapse to get there. At the end of the day, we are all Americans, and I think most Americans can at least agree that the last eight years have been torture :-) While I cannot understand people who advocate torture/waterboarding, I am quite pleased we are able to have a civil discussion that may, in time, cause us to broaden our horizons.

Update: the debate continues, and now it's reached 61 comments. I will include the most recent snippets:

Me: The next time an American soldier gets captured and tortured by foreign enemies, I will contact all three of you and ask you to write an apology to the families of the Americans. You ideology will hurt Americans. If I ever contact you, don't shirk away--man up and apologize for indirectly hurting Americans and for directly harming America's reputation, which has served us so well from Eisenhower until Clinton. Traitors don't know they're traitors. No traitor ever does. That's why it's important to analyze one's beliefs and evaluate whether they will harm the nation, its civilians, and its soldiers. Over 4,000 Americans have died in Iraq post-9/11, fighting in a country that had no connection to 9/11. We fought a war based on what we now know were speculative threats. We engaged in torture in Abu Ghraib as a result of Americans like you playing around with the definition of torture. Americans are now less safe, if only b/c the economic consequences of war have harmed us.

Evan: You are calling me a traitor? Unbelievable. You seem to have a very narrow definition of diversity. It's beginning to be very offensive.

Me: I did not call you a traitor. Read my comment carefully. It's a general comment, not a specific one, and it could conceivably apply to myself. There's at least one thing, however, that definitely separates us--the next time an American soldier gets tortured, waterboarded, beaten, and deprived of sleep, I will have the moral ground to protest--you won't. That doesn't mean you're a traitor--it does mean your beliefs indirectly endanger Americans by blurring the line between acceptable conduct and unacceptable conduct. Your refusal to condemn torture and its inevitable slippery slope during times of war means you have no standing to protest or condemn anyone when abuse of American soldiers occurs. You are consciously trading off America's right to condemn torture of its soldiers in exchange for having a pro-torture policy that *might* produce relevant information. I refuse to make that trade-off when no reliable study has shown that torture produces reliable results.

Restaurant Review: Chaat Bhavan

I really liked a new Indian vegetarian restaurant, so I wanted to share it with my readers. It is located at 5355 Mowry Ave, Fremont, CA 94538 (510-795-1100). Its website is www.chaatbhavan.com (the site loads slowly initially, so be patient). If you're vegetarian, you will love this place; if you're not, you will still love this place.

I ordered the following items:

Dahi Bateta Sev Poori, which is basically crispy noodles with yogurt and chutney.

Bateta Vada, which is potato balls with spices and chickpea flour.

Pav Bhaji with Papad, an orange-colored dish with steam cooked vegetables.

Raita, which is yogurt with different vegetables and spices.

With those four dishes, my friend and I left feeling full, all for less than 35 dollars.

Disclosure: I have no ties whatsoever to this restaurant and have not been given anything in exchange for this post.

Party Like It's 1931?

The CS Monitor's New Economy blog has an interesting post today. I'm not sure past comparisons offer much value today, but when no one knows the future of the market, all they can do is look backwards.

I am in mostly cash right now, even in my retirement funds. I may miss a rally, but real property and cash seem safer than stocks right now. Also, I don't have to keep my cash in low-yielding American dollars. I recently bought the Mexican peso (FXM) and will be looking to buy the Australian dollar (FXA) as well.

Founding Principles: a Majority Shall Not Engage in Tyranny

From Hon. Judge Michael W. McConnell's majority opinion, INITIATIVE AND REFERENDUM INSTITUTE v. WALKER, 450 F.3d 1082 (10th Cir 2006):

One of the Fathers' cardinal concerns was that democratic government not lead to tyrannical rule by a majority over a minority. "When a majority is included in a faction, the form of popular government . . . enables it to sacrifice to its ruling passion or interest both the public good and the rights of other citizens." The Federalist No. 10, at 106 (J. Madison) (Hamilton ed. 1868). The Founders did not think the problem of majority abuse of minorities was limited to those in government: they were particularly worried about the ways in which a majority of the people could impose their will impose on a minority. "The prescriptions in favor of liberty, ought to be levelled against that quarter where the greatest danger lies, namely, that which possesses the highest prerogative of power: But this is not found in either the executive or legislative departments of government, but in the body of the people, operating by the majority against the minority." James Madison, Speech of James Madison to House of Representatives (June 8, 1789) in Daniel A. Farber & Suzanna Sherry,A History of the American Constitution 227, 229 (1990).

Or, we can just quote someone who once said, "Democracy is two wolves and a lamb voting on what to have for lunch." I'll leave you with an amusing spinoff from that quote:

A Democracy: Three wolves and a sheep voting on dinner.

A Republic: The flock gets to vote for which wolves vote on dinner.

A Constitutional Republic: Voting on dinner is expressly forbidden, and the sheep are armed.

Federal Government: The means by which the sheep will be fooled into voting for a Democracy.

Freedom: Two very hungry wolves looking for dinner and finding a very well-informed and well-armed sheep.

Small Things (a poem)

Small Things

Swine flu is in the air.
CNN promises not to fear-monger as the word “pandemic”
flashes across the screen.
I think of the Mexican peso first, then of the Mexican people dying.
It occurs to me my priorities are screwed up.

But then I realize that’s the point--the constant scramble
to survive
to make money
to take care of your family,
It re-arranges everyone’s priorities,
forces people to think ahead, not backwards,
and it seems to work, until it doesn’t.

President Obama’s on the screen now,
talking about that flu again.
I think of the Mexican people first this time.
I think about the American schools shutting down,
and American kids happy to stay home.
I think of how a small thing can multiply into a big thing
and make its way up here without warning.

And then I realize a good thing can also multiply
And come here,
Something we’d never thought about before
until it came here
and changed our lives.

Small things, like six-year old Pierre Omidyar,
arriving in America from France,
his parents from Iran,
Not knowing their little boy would create eBay.

Small things, like Paul and Clara Jobs
adopting a little half-Syrian boy
born in Milwaukee
and bringing him to Mountain View, California,
where he would grow up and give us Apple Computers.

Smaller things, too, like 27 dollars loaned by a man in Bangladesh
who spoke at Stanford in 2003
and caught the ears of Matt and Jessica Flannery,
who then founded Kiva.org.
Soon came millions of dollars to help the poor.

Small things become big when they cross borders
undeterred by risk, failure, or fear.
They come, these small things,
flu particles, yes, but also the seeds of a bright future,
Burrowing their way forward.

(2009)

Wells Fargo Shareholder Meeting (2009): the Age of Uncertainty

I attended Wells Fargo's 2009 annual meeting today in San Francisco, California. Wells Fargo (WFC) did not seem to anticipate such a large crowd attending its meeting. It had to scramble to set up more chairs in an adjacent viewing area where shareholders could view the meeting on a large video screen. In a scene reminiscent of a Friday night club, some shareholders (including myself) had to wait downstairs before security allowed us to take the elevator to enter the meeting. Per its conservative image, Wells Fargo did not offer any coffee or refreshments. I asked an employee whether Wells Fargo had served coffee or refreshments at last year's meeting, and she said she didn't remember Wells Fargo serving food or drinks at any annual shareholder meeting.

Chairman Richard "Dick" Kovacevich spoke first and appeared in a good mood, making several well-received jokes. He earned my respect for being forthright in this earlier speech, where he stated, "We [the financial sector] really caused this crisis."

After the formal portion of the meeting had concluded, he turned the meeting over to President and CEO John Stumpf. First, let me give you some visuals. Mr. Kovacevich is a tall man who exudes confidence in a friendly way. Mr. Stumpf, on the other hand, is shorter, more intense, and much more brusque. I would almost compare them to Robert DeNiro and Joe Pesci (Goodfellas or Casino, take your pick)--effective men, each in his own way.

Mr. Stumpf delivered a short presentation. He began by rattling off all the names of failed financial institutions--AIG, Bear Stearns, Countrywide, Fannie Mae, Lehman Brothers, Merrill Lynch, and WaMu. These are "difficult times," he said. He went through some slides showing that Wells Fargo had made money and continues to grow. One slide was confusing--it showed WFC reporting $0.70 of diluted EPS, but had a shadow area that added $1.51 in EPS, which assumed the inclusion of credit reserves. Including the credit reserve build, the additional EPS would have brought the numbers in line with previous earnings. I did not understand what the additional EPS meant, and even after I asked Mr. Stumpf to explain it again during the Q&A, I still didn't fully understand it. (My current understanding is that Wells Fargo had set aside billions of dollars to cover expected future loan losses, especially due to the Wachovia acquisition, and had it not been forced to account for its expected losses, its earnings per share would have increased.)

Mr. Stumpf talked about the dividend and the "difficult decision" to cut it. He indicated WFC would increase the dividend when "practicable" to do so. Wells Fargo's cutting of its dividend signals a tectonic shift. If you go back to a time when banks were staid creatures, people would buy banking shares for the dividend. They expected that a bank would slowly and conservatively increase deposits and make more loans over time, allowing the bank to steadily increase its dividend. As a result of their consistent dividends, banking stocks were called "widows and orphans" stocks--held by husbands to protect their families when they died. That age is over. Banks have lost the public's trust, and with it, we have entered a new world of uncertainty. This change is shocking because even banks that acted conservatively, like Wells Fargo, had to cut their dividends, breaking their implicit promise to maintain steady payouts. If there is one unfortunate lesson to be learned from this crisis, it's that being good didn't pay off. As a result of widespread and creative financial engineering, the good banks got sucked into the morass created by bad banks like Citigroup (C) and Bank of America (BAC). Now, senior citizens looking for income have few places to invest. Even preferred shares are suspect.

Mr. Stumpf returned to his theme of consistent growth. He said that even during this tough time, WFC "grew revenues by 6%" while reducing expenses by 1%. He said the amounts loaned also increased, although most of that increase came from the commercial and wholesale areas, not the consumer. Deposits also increased as a result of the "flight to quality."

Mr. Stumpf then talked about Wells Fargo's two major events: Wachovia and the government's $25 billion investment in Wells Fargo. He said the Wachovia acquisition was going well, and Wells Fargo would pay back the government as soon as practicable. He said companies fail when they confuse their mission with the results. WFC's mission was to help people succeed financially, and the result was that "we make money." Bad companies, he said, mix these up and focus on making money over serving their customers. Mr. Stumpf ended his presentation by pointing out Wells Fargo's charitable contributions, which were impressive.

The Q&A session was longer than usual, and most shareholders had interesting questions. One thing about Mr. Stumpf, though--if he doesn't like your question, he'll give you a quick answer and expect you to move on. Several times, he avoided answering questions by using humor to deflect the question (Those of you who remember my Joe Pesci comparison can start visualizing him saying, "Funny? Funny how?").

One shareholder asked about Citibank's (C) lawsuit against Wells Fargo (which relates to the Wachovia acquisition). Mr. Stumpf said Wells Fargo would defend itself vigorously.

I asked whether the government forced Wells Fargo to take TARP money. After all, if Wells Fargo didn't need it, why didn't they reject it? Mr. Stumpf tried to avoid answering the question, so I asked Mr. Kovacevich directly for an answer. He said government negotiations were confidential, but added, "We did not ask for the money." He said he took the money because it was in the best interests of the company at the time.

Another shareholder talked about a personal issue. Apparently, Wells Fargo had increased his interest rate. The shareholder complained about Wells Fargo's customer service. At first, Mr. Stumpf asked whether the shareholder had a question. (At this point, I started thinking Mr. Stumpf might take a bat to this guy's knees.) After the shareholder meekly said, "I guess I don't have a question," Mr. Stumpf wisely turned on the charm. He said, "I'm sorry," and directed the shareholder to a specific Wells Fargo employee for further assistance.

Another shareholder praised the bank. He was a former employee who had held Wells Fargo shares since at least 1998.

Another shareholder talked about zombie banks and whether nationalization would be a good idea. Mr. Stumpf replied, "We are solvent" and "clearly not a zombie bank." He said his understanding was that the President and Congress had rejected nationalization.

Another shareholder asked whether Wells Fargo anticipated raising its capital base, thereby diluting its common equity shareholders. In a telling sign of how uncertain the current environment is, Mr. Stumpf refused to comment one way or another. When you strip down the optimism, no one really knows. Look at page 78 of Wells Fargo's 10K:

Under SOP 030-3 (Accounting for Certain Loans or Debt Securities Acquired in a Transfer), we recorded at fair value all credit-impaired loans acquired in the merger based on the present value of the expected cash flows...using assumptions about matters that are inherently uncertain.

Essentially, Wells Fargo itself admits its numbers are "inherently uncertain." The only thing we know for sure is that Wells Fargo's earnings received a boost from a recent loosening of the mark-to-market accounting rules. Still, regardless of any accounting changes, at the end of the day, no one really knows anything, because there are too many unknown variables. That's why Wells Fargo accepted $25 billion of our money--it doesn't really know, either, and if it did, it would have paid back the government already. [Update: some banks have already paid back TARP funds. See here.] So of course the CEO can't promise to avoid further capital injections. Of course the CEO can't promise to avoid diluting the common equity shareholders. Like everyone else, he doesn't really know what's around the corner. When historians study this current time period, the honest ones will admit no one really knew anything. It's sheer hope and faith that's driving many Americans, and, by extension, the banks to which they owe money.

I went up to the mic one last time. I told Mr. Stumpf some people think that "too big to fail" should be "too big to exist." I implied that we weren't addressing any of the root causes of our current problems and that this crisis could happen again. I said it was frightening to see the stock market go up and down based on the appearance of the banking sector's good or bad health. I indicated that banks, a relatively small group, had tremendous power over the average Joe's 401k. I said that Wells Fargo had spoken against some regulation, such as executive pay restrictions (see also 10K: page 78), but it hadn't talked about what regulation it favored. I asked Mr. Stumpf to talk about what regulations he favored so that we could avoid another crisis.

Mr. Stumpf had a two-part answer. He said that only 22% of financial assets are held in commercial banks. He said most financial assets are held by unregulated entities, such as AIG (and others who thought credit default swaps were a great idea). At this point, his answer became somewhat confusing. From what I understood (and discussed with an Aussie couple after the meeting), Mr. Stumpf implied that we should expand financial regulation, but without adding another government agency. He did not favor the current situation, where multiple regulatory bodies cover select financial entities while excluding other major financial players. (Or, according to the Aussie gentleman, "Don't go swimmin' without your trunks"--demand everyone have some covering if they want to play in the pool.)

Mr. Stumpf also suggested we should try to minimize systemic risk. He seemed to indicate that all of the banks' assets should come under one umbrella so that the overall risk of the banking sector could be easily ascertained. Again, I am not certain this is what he said, because Mr. Stumpf talks quickly. While he clearly understands complex financial terms and ideas, he seems to have a hard time communicating those ideas to the general public. (This is why WFC needs Mr. Kovacevich--his easygoing, amiable style balances Mr. Stumpf's abrupt demeanor.) From what I heard, however, it sounded like even the banking sector's head honchos acknowledged that greater transparency and governmental involvement were necessary to minimize systemic risk. Perhaps thinking he'd said too much, Mr. Stumpf stopped. That's when I realized the point and theme of the meeting was to project confidence, because at the end of the day, that's what America needs, especially from the banking sector. I think Wells Fargo did an admirable job at the meeting, but again, no one knows anything. Only time will tell whether America exits this banking crisis stronger.

The AP's Michael Liedtke's review of the meeting can be found here. As of the record date, I had 9000 WFC shares. I used margin and felt uncomfortable with the volatility, selling all my shares at around $14/share. Investors who bought Wells Fargo stock recently and had the fortitude to hold on have been rewarded. As I wrote here earlier, an investor could have made 46% had s/he timed the market properly.

Random fact: Warren Buffett owns approximately 7.4% of WFC common shares. See page 13 of Wells Fargo's 2009 proxy statement.

Bonus: The Economist has an interesting article (May 14, 2009: "Three trillion dollars later...") on banking:

http://www.economist.com/opinion/displaystory.cfm?story_id=13648968