One technique that is used for problem solving is called 'is - is not', where one starts by listing what the problem is and what it is not. One can then use the list to sort thru different ideas on what caused the problem, discrading as many as possible. The article below is a good example of a large bank in one the ground zero subprime areas of the country, a bank that has evidently weathered the mess better than most. Why is that ?
http://www.oregonlive.com/business/oregonian/index.ssf?/base/business/1223709907259580.xml&coll=7
Sticking to basics pays off for Wells Fargo
Banks - As rivals gambled, the lender avoided risks, helping it acquire WachoviaMonday, October 13, 2008 MICHAEL LIEDTKE
"Wells Fargo knows how to gather deposits, sell additional products and not make loans to people who can't afford to pay them back," Celent analyst Bart Narter said last week.
It sounds simple, but sticking to the banking basics wasn't standard operating procedure while home prices were soaring in a four-year stretch that ended in 2006. The real estate boom emboldened lenders to lower their standards and offer mortgages that began with abnormally low interest rates before shifting upward to saddle borrowers with monthly payments they couldn't afford to make.
Although Wells Fargo consistently ranked among the largest U.S. mortgage lenders during this frothy period, the bank mostly avoided the crazy stuff that ultimately destroyed Countrywide Financial, Washington Mutual, Wachovia and a long list of other lenders.
The aversion to risky loans was instilled by Wells Fargo's leader for the past decade, Richard Kovacevich, who handed the chief executive reins over to John Stumpf last year. Kovacevich, though, remains Wells Fargo's chairman and is planning to postpone his retirement plans to help complete the Wachovia merger.
Wells Fargo's lending discipline is even more impressive, given its prominence in California -- an epicenter of the real estate boom and bust.
Not that Wells Fargo has remained completely pristine. The bank has taken a $1.4 billion loss on ill-advised home equity loans and delved into the dicey subprime market through an arm that caters to consumers with shabby credit records.
Wells Fargo still hasn't posted a quarterly loss during the past year of upheaval, though its profits have been shrinking during the past nine months.
"They aren't perfect, but they have done enough things right where they look like they are going to be among the chosen ones in this period of banking consolidation," said analyst Frederick Cannon of Keefe, Bruyette & Woods Inc.
http://www.oregonlive.com/business/oregonian/index.ssf?/base/business/1223709907259580.xml&coll=7
Sticking to basics pays off for Wells Fargo
Banks - As rivals gambled, the lender avoided risks, helping it acquire WachoviaMonday, October 13, 2008 MICHAEL LIEDTKE
"Wells Fargo knows how to gather deposits, sell additional products and not make loans to people who can't afford to pay them back," Celent analyst Bart Narter said last week.
It sounds simple, but sticking to the banking basics wasn't standard operating procedure while home prices were soaring in a four-year stretch that ended in 2006. The real estate boom emboldened lenders to lower their standards and offer mortgages that began with abnormally low interest rates before shifting upward to saddle borrowers with monthly payments they couldn't afford to make.
Although Wells Fargo consistently ranked among the largest U.S. mortgage lenders during this frothy period, the bank mostly avoided the crazy stuff that ultimately destroyed Countrywide Financial, Washington Mutual, Wachovia and a long list of other lenders.
The aversion to risky loans was instilled by Wells Fargo's leader for the past decade, Richard Kovacevich, who handed the chief executive reins over to John Stumpf last year. Kovacevich, though, remains Wells Fargo's chairman and is planning to postpone his retirement plans to help complete the Wachovia merger.
Wells Fargo's lending discipline is even more impressive, given its prominence in California -- an epicenter of the real estate boom and bust.
Not that Wells Fargo has remained completely pristine. The bank has taken a $1.4 billion loss on ill-advised home equity loans and delved into the dicey subprime market through an arm that caters to consumers with shabby credit records.
Wells Fargo still hasn't posted a quarterly loss during the past year of upheaval, though its profits have been shrinking during the past nine months.
"They aren't perfect, but they have done enough things right where they look like they are going to be among the chosen ones in this period of banking consolidation," said analyst Frederick Cannon of Keefe, Bruyette & Woods Inc.
