Color me Skeptical

... about the run up in stocks. I just don't see what the underlying, real reason is for the jump. In terms of the real economy, the news is still very gloomy. Housing starts and building permits got killed last month. Shipping is still falling. Commodities aren't going anywhere. Mortgage defaults in San Diego are still rising. It seems like the "green shoots" are all coming from the banks. Wells Fargo claimed to have made a profit in the last quarter, but Bloomberg's Jonathan Weil dissected the report and found mysteries where none should exist.

The most closely watched measure of a bank’s capital these days is a bare-bones metric called tangible common equity. While the term doesn’t have a standardized definition under generally accepted accounting principles, it typically means a company’s shareholder equity, excluding preferred stock and intangible assets, such as goodwill leftover from past acquisitions.

Measured this way, Wells had $13.5 billion of tangible common equity as of Dec. 31, or 1.1 percent of tangible assets. Yet in a March 6 press release, Wells said its year-end tangible common equity was $36 billion. Wells didn’t say how it arrived at that figure. Nor could I figure out from the disclosures in Wells’s annual report how it got a number so high.

Hiding the source of these numbers is against SEC rules. Where did they come up with $23B in 3 months, tripling their common equity? Spooky stuff, if you ask me.