WHAT DOES WELLS FARGO SEE?
Wells Fargo is considered one of the more prudent financial institutions on wall street. Like 2006 and 2007, Wells tends to reduce risk as economic conditions mature, and carefully move back in once they improve.
Wells reported today and there was one clear takeaway. They are adding risk at this moment. Both auto loans and first-year mortgages saw a rise year over year. Not only did auto loans move higher year over year, but the figure was +45%, a staggering change in perceived opinion. Time will tell if this view pans out for Wells Fargo, but I like the sign of a highly scrutinized, consistently prudent bank turning on its loans in highly cyclical areas of the loan book.
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