Wednesday, January 21, 2009
A Buffet Bank Disappoints
U.S. Bancorp (NYSE: USB) posted 2nd quarter earnings of $0.15 per share versus a street estimate of $0.28 per share.
Warren Buffet holds large stake in Wells Fargo, U.S. Bancorp and M&T Bancorp. All three had outperformed the industry through most of 2008. However, the cracks started to show late in the year. Wells Fargo was in the same business as Wachovia and Countrywide. It made no sense that the market assumed that they had some magic formula that would allow them to escape the massive default wave that crushed the others. The worsening commercial real estate market will continue to pummel U.S. Bancorp and will weigh on M&T. Lesson here is: always do your own homework.
Equity futures are off their overnight highs: pointing to a rise of 65 points for the Dow
Posted by MK at 8:02 AM