The banks move fast

A couple of the stress test banks that need to raise capital have already done so. Wells Fargo sold $7.5 billion in stock. Morgan Stanley raised the same amount selling stocks and bonds. What’s really interesting here is that all the banks think the government is way underestimating the banks’ future profits.

That’s why Wells only raised half the $15 billion it needs. Wells is counting on profits being much higher than what the government projected. From the Financial Times:

Howard Atkins, chief financial officer of Wells Fargo, spoke for many of his colleagues when he decried the government’s view of his bank’s profits.

“The Fed’s results differ considerably from our results,” he said. “We’ve had a 20-year record here at Wells Fargo and if there’s one thing we do know, it’s revenue.”

I guess we’ll see. The banks sound awfully cocky at a time when it would serve them much better to be humble.