Trade Update: SKF

We were stop out of SKF yesterday, on the smoke and mirror cheer leading by Wells Fargo. The market dropped at the open and you just knew the specialist were in cahoots. This is worth watching since Wells didn't report, they only pre reported and offered few details especially regarding Mark to Market and provisions for loan loss reserves.

“We believe that credit quality materially deteriorated in the first quarter, and that Wells Fargo is under-reserving for expected future losses,” FBR’s Miller wrote in a Wednesday research brief. “We reiterate our Underperform rating.”

More questions from Miller: “[W]e remain cautious based on what we don’t know. Most importantly, what happened to nonperforming loans and what would have been net charge-offs excluding purchase accounting adjustments? What are the trends in WFC’s Option ARM portfolio? Did the company write up the MSR and what was the new capitalized cost of servicing? Was there any benefit from an increase in level 3 assets given recent accounting guidance?”

Pile on top of that the fact that Citigroup, UBS, and other big banks saw their earnings driven through the Goldman AIG Conduit.