What a sorry state of affairs. Nice computer models in this industry, huh? I still find it hard to believe that all of these companies both in the US and Europe, could all have such pie-in-the-sky forecasting in their systems. Are they honestly saying that nobody out there in the industry could foresee the crash? Many in the Pentagon predicted the sloppy mess in Iraq, so I find it hard to believe the financial industry missed this one.
Wells Fargo & Co (WFC.N), the second-largest U.S. mortgage lender, said on Tuesday it would take a $1.4 billion fourth-quarter charge largely related to losses on home equity loans as the nation's housing market deteriorates.The industry certainly is cyclical though the depth of the losses are something that did not have to happen so what went wrong and why? The obvious first thought is that too many people made too much money from fluff instead of real business. What is more troubling is that people such as Greenspan should have stepped in and raised a few flags but he too was caught up in the excitement. Perhaps he was excited about heading into retirement with a hot economy? I don't know, but this costly debacle will be a drag on the economy and on individuals for a while. We deserve much more from our government than this. Much more.
The company, which is also the fifth-largest U.S. bank, said it also was significantly scaling back making home equity loans through brokers, citing a need to tighten lending standards and reduced demand from investors to buy the loans.
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