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Double Tap For Octogenarian Of Omaha: Wells Downgraded From A1 To A2

Tyler Durden's picture


Buffett tells Obama how to tax the country and all he gets is this lousy shirt that says "I got double penetrated by Moody's on Central Planning day"

Moody's Investors Service downgraded the long-term ratings of Wells Fargo & Company(holding company senior debt to
A2 from A1) and of its major subsidiaries including Wells Fargo Bank N.A.
(rating on the bank for deposits to Aa3 from Aa2). The actions conclude a review for downgrade announced on June 2, 2011. The outlook on the long-term senior ratings remains negative.
The downgrades result from a decrease in the probability that the US government would support the bank, if needed. Moody's believes that the government is likely to continue to provide some level of support to systemically important financial institutions. However, it is also more likely now than during the financial crisis to allow a large bank to fail should it become financially troubled, as the risks of contagion become less acute. Moody's is therefore lowering the amount of support it incorporates into Wells Fargo's ratings to levels reflected prior to the crisis.
The ratings affected are as follows:
Wells Fargo & Company: Moody's downgraded the supported long-term senior debt rating to A2 from A1. The Prime-1 short-term rating was affirmed as was the unsupported hybrid ratings issued by or guaranteed by Wells Fargo & Company. (Junior subordinated debt rated at Baa1 (hyb)). The holding company senior debt ratings now incorporate one notch of uplift due to systemic support, down from two notches previously. The outlook on the supported ratings is negative and the outlook on the unsupported hybrid ratings is stable.
Wells Fargo Bank N.A.: Moody's downgraded the long-term bank deposit and senior bank debt ratings to Aa3 from Aa2 and the short-term Prime 1 ratings was affirmed. The bank financial strength rating (BFSR) of C+ was also affirmed, and the banks' corresponding baseline credit assessment
(BCA) or unsupported rating, remains unchanged at A2. The bank deposit and senior debt ratings now incorporate two notches of uplift due to systemic support, down from three notches previously. Moody's also affirmed the hybrid rating guaranteed by Wells Fargo Bank N.A. at A3 (hyb). The outlook on the supported ratings is negative and the rating on the unsupported ratings is stable.
Please see the link for a full list of rating actions.
Moody's will publish separate press releases on other institutions covered by the reviewed announced on June 2, 2011.
Moody's continues to see the probability of support for highly interconnected, systemically important institutions as very high, although that probability is lower than it was during the financial crisis. During the crisis, the risk of contagion to the US and global financial system from a major bank failure was viewed as too great to allow such a failure to occur -- a view borne out in the aftermath of the Lehman failure. This led the government to extend an unusual level of support to weakened financial institutions and Moody's to incorporate the expectations of such support in its ratings. Now, having moved beyond the depths of the crisis, Moody's believes there is an increased possibility that the government might allow a large financial institution to fail, taking the view that contagion could be limited.
Moody's decision to assign a negative rating outlook reflects the possibility it may further reduce its systemic support assumptions in the future as a consequence of the process set in motion by the enactment of the Dodd-Frank Act.. Under the rules recently finalized by the FDIC, the orderly liquidation authority included in Dodd-Frank demonstrates a clear intent to impose losses on bondholders in the event that a systemically important bank such as Wells Fargo was nearing failure. If fully implemented, the provisions of Dodd-Frank could further lower systemic risk by reducing interconnectedness among large institutions and could further strengthen regulators' abilities to resolve such firms.
However, the final form of several critical components of Dodd-Frank intended to reduce such interconnectedness, such as resolution plans or changes to the over-the-counter derivatives market, are still pending.
There is also no global process yet in place whereby regulators could resolve a global financial company such as Wells Fargo in an orderly fashion. As a result, Moody's believes that it would be very difficult for the US government to utilize the orderly liquidation authority to resolve a systemically important bank without a disruption of the marketplace and the broader economy.
The principal methodologies used in rating were "Bank Financial Strength
Ratings: Global Methodology" published in February 2007, "Incorporation of Joint-Default Analysis into Moody's Bank Ratings: A Refined Methodology" published in March 2007, and "Moody's Guidelines for Rating Bank Hybrid Securities and Subordinated Debt" published in November 2009.
Please see the Credit Policy page on for a copy of these methodologies.
Wells Fargo is headquartered in San Francisco. Its reported assets were
$1,260 billion at June 30, 2011.


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Wed, 09/21/2011 - 12:58 | 1693005 Dr. Engali
Dr. Engali's picture

Come on do something bold. Be honest and downgrade them to junk. Doesn't Warren own Moody's ?

Wed, 09/21/2011 - 13:03 | 1693046 BrocilyBeef
BrocilyBeef's picture

Slooooow progress.

Wed, 09/21/2011 - 13:07 | 1693071 Landrew
Landrew's picture

Yes, Mr Potter owns Moody's

Wed, 09/21/2011 - 13:09 | 1693085 Clorox Cowboy
Clorox Cowboy's picture

Keep in mind that Grandpa Warren has the magical ability to grant Quadruple A ratings all by himself!  These "official" downgrades are merely a transitory annoyance for the Oracle.

Wed, 09/21/2011 - 12:57 | 1693007 Belarus
Belarus's picture

The worms are all turning on one another. The rush to gold and silver is on.

Wed, 09/21/2011 - 13:06 | 1693060 BrocilyBeef
BrocilyBeef's picture

not yet. I think we haven't seen "the rush."

Tickets to this play have a different plot for each seat.

Plenty of people are still watching "The Stage" for the show...

Wed, 09/21/2011 - 12:57 | 1693008 Robslob
Robslob's picture

The double tap...priceless.

The market continues to levitate waiting on 1 man!

Wed, 09/21/2011 - 12:58 | 1693010 Ahmeexnal
Ahmeexnal's picture

Buffet is a moron.

His head will soon fall into a basket.

Wed, 09/21/2011 - 12:58 | 1693013 Don Birnam
Don Birnam's picture

As Raymond Chandler would say,

"Two in the hat."

Wed, 09/21/2011 - 13:31 | 1693247 WonderDawg
WonderDawg's picture

A fellow Raymond Chandler fan. I admire your taste in literature, sir.

Wed, 09/21/2011 - 12:59 | 1693019 nyse
nyse's picture

Double Tap?

One in the pink, two in the stink?

Wed, 09/21/2011 - 12:59 | 1693020 buzzsaw99
buzzsaw99's picture

Tackled by our own man!

Wed, 09/21/2011 - 12:59 | 1693021 digalert
digalert's picture

Relax Warren, you've got a tax in your name...


Wed, 09/21/2011 - 12:59 | 1693025 MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture


Wed, 09/21/2011 - 13:00 | 1693028 Xibalba
Xibalba's picture

Old relic....should be put down already. 

Wed, 09/21/2011 - 13:00 | 1693029 lieutenantjohnchard
lieutenantjohnchard's picture

here's to wishing that moody's and s&p are to banks what the gold pool and the current bullion banks are to gold and silver. may the banks enjoy the fish line drop.

Wed, 09/21/2011 - 13:01 | 1693033 jesus_quintana
jesus_quintana's picture

Buffett tells Obama how to tax the country and all he gets is this lousy shirt that says "I got double penetrated by Moody's on Central Planning day"

I hope they didn't waste any lube on the old bastard.

Wed, 09/21/2011 - 13:18 | 1693146 Moe Howard
Moe Howard's picture

I think they are going for the trifecta, making him waterproof.

Wed, 09/21/2011 - 13:01 | 1693036 fyrebird
fyrebird's picture

Maybe Moody's has it in for Warren on account of him dumping their stock from his holdings. It's as bad as dumping a woman, I swear.

Repeat after me: Hell hath no fury like a ratings agency.

Wed, 09/21/2011 - 13:02 | 1693040 SheepDog-One
SheepDog-One's picture

OH snap, the geezer takes one right up the kornhole!!

Fri, 09/30/2011 - 12:49 | 1726304 Freddie
Freddie's picture

The evil old con man needs to have Nebraska korn kobs shoved up his rectal orifice.

Wed, 09/21/2011 - 13:02 | 1693042 Gubbmint Cheese
Gubbmint Cheese's picture

the old DP.. priceless. Thx TD

Wed, 09/21/2011 - 13:03 | 1693044 junkyardjack
junkyardjack's picture

Makes me wonder what Obama and Buffett were talking about on the phone a few weeks ago before the BAC investment.  The Fed FTW!

Wed, 09/21/2011 - 13:13 | 1693110 Temporalist
Temporalist's picture

Choice of lubes?

Wed, 09/21/2011 - 13:03 | 1693047 Sqworl
Sqworl's picture

LMAO..double penetration...priceless

Wed, 09/21/2011 - 13:38 | 1693291 pods
pods's picture

I wonder if Warren auditioned for that Ned Beatty part a long time ago?

Could see his old ass scrambling up a hill in his tighty whities.

"He gotta a real pretty mouth ain't he?"


Wed, 09/21/2011 - 14:19 | 1693497 TheFourthStooge-ing
TheFourthStooge-ing's picture

Squeal like a PIIG, gramps!


Wed, 09/21/2011 - 13:04 | 1693050 ZeroPoint
ZeroPoint's picture

Was it really a double penetration or was it a dirty ass-to-mouth for old Warren?

Wed, 09/21/2011 - 14:21 | 1693504 TheFourthStooge-ing
TheFourthStooge-ing's picture

Was it really a double penetration or was it a dirty ass-to-mouth for old Warren?

A2M2M: ass to mouth to Munger


Wed, 09/21/2011 - 13:04 | 1693052 LasVegasDave
LasVegasDave's picture

theres gonna be blood in that bathwater

Wed, 09/21/2011 - 13:06 | 1693065 BrocilyBeef
BrocilyBeef's picture

and lots of pee.

Wed, 09/21/2011 - 13:12 | 1693106 Temporalist
Temporalist's picture

And dying old-man skin and.

Wed, 09/21/2011 - 13:04 | 1693054 Jumbotron
Jumbotron's picture

"I got double penetrated by Moody's on Central Planning day"

First I did a spit take of my coffee when I read that it was so funny.

Then I imagined how that would look and lost my lunch.

Thanks Tyler....that's the way for me to give up caffeine and lose weight at the same time.

Wed, 09/21/2011 - 13:07 | 1693070 BrocilyBeef
BrocilyBeef's picture

life is good! It's nice to see around the bullshit.

Wed, 09/21/2011 - 13:05 | 1693056 lolmao500
lolmao500's picture

Have a heart attack Buffet!! You won't be missed!

Wed, 09/21/2011 - 13:05 | 1693057 Dr. Engali
Dr. Engali's picture

Hey I just realized something. Five days ago was my one year anniversary at the hedge. No flowers no kiss my ass... nothing. Tyler I'm concerned that we are starting to drift. :)

Wed, 09/21/2011 - 13:05 | 1693058 IQ 145
IQ 145's picture

The market reaction for WFC lasted about 4 minutes; it's now high on the day; good bargain available on BAC at $6.52.

Wed, 09/21/2011 - 13:11 | 1693100 Landrew
Landrew's picture

A better bargin at .99 ha! I played C all the way down and picked up 5k at .99 this to will pass!

Wed, 09/21/2011 - 13:06 | 1693061 CrimsonAvenger
CrimsonAvenger's picture

Is it odd that they're announcing these just minutes before the Fed announcement? Trying to bury them in larger news?

Wed, 09/21/2011 - 13:08 | 1693079 NotApplicable
NotApplicable's picture

Manufacturing consent via TINA.

Wed, 09/21/2011 - 13:09 | 1693088 Temporalist
Temporalist's picture

Perhaps it is that they are in the news so they can be used as an excuse to bailout more failures and do Bernankes favorite pastime...printing.

Wed, 09/21/2011 - 13:07 | 1693068 NotApplicable
NotApplicable's picture

So, in reality, the ratings for the banks didn't fall, but faith in the "political will" to support them did.

Sounds like a setup for a political mandate to me. How many more minutes before Bennie takes the stage?

Wed, 09/21/2011 - 13:07 | 1693069 Temporalist
Temporalist's picture

I guess as investors one can side with Buffett and choose not to bury a metal in the ground and instead invest in fraudulent govt. backed banks that rob taxpayers and customers.

Wed, 09/21/2011 - 13:08 | 1693076 Storch
Storch's picture

What happens to the rules of space and time if Moody's downgrades itself?  

Wed, 09/21/2011 - 13:08 | 1693080 LeonardoFibonacci
LeonardoFibonacci's picture


Wed, 09/21/2011 - 13:09 | 1693086 LeonardoFibonacci
LeonardoFibonacci's picture

Hey Tyler keep them coming superb stuff! 

Wed, 09/21/2011 - 13:09 | 1693087 equity_momo
equity_momo's picture

Bad news comes in 3s. Still one more to downgrade will be Berkshire itself.

And then it'll be more of a "2 to the chest and 1 to the head"

Wed, 09/21/2011 - 13:10 | 1693095 Quinvarius
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Dude, that is the funniest first sentence of anything I have read in a long time.

Wed, 09/21/2011 - 13:13 | 1693111 Texas Ginslinger
Texas Ginslinger's picture

Buffet owns 13% of Moodys, and 2.8% of Wells Fargo.

With this downgrade of WF should come a drop in stock price.

Hey, Warren, BTFD...

Wed, 09/21/2011 - 13:21 | 1693180 pelican
pelican's picture

The stock market has gone up since this announcement. Interesting behavior to watch people run into a burning building when they are not firemen.

Wed, 09/21/2011 - 13:25 | 1693211 Catch-22
Catch-22's picture

The Barnacle of Omaha...

Wed, 09/21/2011 - 13:25 | 1693212 Die Weiße Rose
Die Weiße Rose's picture

my name is WARREN and all I got is this lousy shirt that says:

"I got double penetrated by Moody's on Central Planning day"

lmfao ;)

Wed, 09/21/2011 - 15:07 | 1693855 treemagnet
treemagnet's picture

I don't laugh out loud much, but I sure did with that one.  Funny shit for sure!

Wed, 09/21/2011 - 13:27 | 1693224 Segestan
Segestan's picture

The Oracle needs to merely involk hope and change... ya that should do it.

Wed, 09/21/2011 - 13:28 | 1693231 Trimmed Hedge
Trimmed Hedge's picture

WFC currently up 1% on the news

Wed, 09/21/2011 - 13:28 | 1693233 DonnieD
DonnieD's picture

Does anyone think the Octo Man wasn't positioned to profit off this Moody's announcement. I'm sure he's buying cheeseburgers and cherry cokes for the entire office today.

Wed, 09/21/2011 - 13:29 | 1693239 gorillaonyourback
gorillaonyourback's picture

tyler, why if we live in a world of central planning would they allow moodys, fitch etc to down grade the banks?  Im thinking  they are trying to consolidate the banking industry even further.  if they want a world currency and a strong world bank the fewer players the better.  also consolidation also hides the losses even beter

Wed, 09/21/2011 - 13:43 | 1693321 NuYawkFrankie
NuYawkFrankie's picture

There was an old phart called Buffit,

With an orifice so tight, 'twas a snug-fit,

'Till the banks came along

And plowed it so long

Now it's doubtful a bar-bell could stuff-it

Wed, 09/21/2011 - 13:43 | 1693322 NuYawkFrankie
NuYawkFrankie's picture

There was an old phart called Buffit,

With an orifice so tight, 'twas a snug-fit,

'Till the banks came along

And plowed it so long

Now it's doubtful a bar-bell could stuff-it

Wed, 09/21/2011 - 14:49 | 1693656 JuicedGamma
JuicedGamma's picture

Pulitzer material! ROTFL!

Wed, 09/21/2011 - 14:54 | 1693715 boattrash
boattrash's picture

Not to sound sadistic, but I hope one of the penetrations came from a barbed-wire wrapped baseball bat!

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