Financial Crisis Heroes
There aren't too many heroes in the financial crisis currently gripping Wall Street and, as the politicians are too fond of saying, Main Street. But one of the few is Wells Fargo & Co. Why? Because they've proven time and time again that they're one of the best managed banks in the country.
I was interviewed by a journalist a few days ago and she asked me for examples of industries where college students should look for internships and recent graduates should look for entry level jobs. It was a difficult question to answer given the severity of the crisis and the lack of hiring by most organizations right now -- even healthcare is seeing layoffs. My answer was that the federal government looks like a safe harbor right now for those who want to maximize their chance of being hired while minimizing their chance of being laid off. But I should have pushed back on the question a bit and reminded her that job seekers don't apply to work for an industry. They apply to work for an organization and that there are many very good organizations which are hiring.
Wells Fargo is an example of one of those very good organizations. My wife used to work for Wells when it was Norwest and headquartered in Minneapolis but now we're just customers and shareholders. One of the primary reasons that we've retained stock in Wells all of these years is that we have a tremendous amount of respect for its management and the current financial crisis is reinforcing our feelings. While many competitors of Wells made stupid bets on stupid mortgages and then cried for a federal bailout after seeing their stocks plummet like rocks, Wells instead stayed conservative like a good bank should and has been rewarded by seeing its stock price climb this year. That's right. They're up for the year. Remarkable.
A week ago, Citigroup seemed poised to take over Wachovia at a deep discount made possible through the forced generosity of taxpayers like you and me. Then on Friday Wells stepped in and made a far superior offer. Citigroup litigated but today it looks like the feds are going to try to mediate so that Wachovia doesn't get tied up in litigation for months or years. If Wachovia's stupid loans didn't kill it, the litigation would.
If only there were more financial institutions like Wells Fargo. If there were, this country and even the world wouldn't be in the financial mess that it is in right now. Wells is in business to make a profit and should be, but their management understands the old adage that pigs get fat and hogs get slaughtered. Unfortunately, there were a lot of bankers in a lot of organizations who were hogs and now we're picking up the tab for their slaughter.
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