Question: Wells Fargo just announced quarterly financials in very positive position. Do you think this is a really significant event? How should we evaluate the latest numbers?
Paul Solman: Your guess is as good as mine, Sheldon. I’ll quote again something I heard in business school 33 years ago that I mentioned just the other day here: “Give me the accountant I want, and I’ll give you the earnings you want.”
Now that the mark-to-market rules are relaxed, I’d say the reliability of any financial firm’s numbers are dubious. Which may be for the better. The system withstood the Third World debt crisis of the early ’80s by looking the other way; not forcing banks to write down their loans, that is. If they had, they’ve have been bankrupt and gone under.
Come to think of it, maybe that wouldn’t have been such a bad idea. I’m beginning to change my mind as I write this response. I’d better stop.