wabuffo

USB (like WFC) has a business model that emphasizes non-interest income (WFC through cross-selling to their bank customers stuff like insurance and USB through its payments business which generates transaction income - eg trusts, debit cards, etc). So, in addition to strong deposit gathering and conservative credit underwriting, USB generates a significant amount of non-lending related income. In USB's case, they are growing this business rapidly and it creates a positive cycle as they can afford to be more choosy on their lending (which further reduces loan losses and gives them better lending returns as seen in the recent TARP results). This business model tends to give USB a higher ROA and ROE in comparison to other banks and makes them a bit less reliant on pure lending. There's only a few non-investment-bank banks that do this. I would recommend you examine and compare a few of the big regional "pure" banks' income statements and try to see the difference (eg compare USB vs MTB, BBT, or PNC). Hope this helps. wabuffo

the author clearly hasn't even done any research on BRK's equity put sales. He is very confused because: 1) he doesn't apparently understand that these are European-style put options (exercisable only on the day of expiry) vs. American-style put options (exercisable anytime they are in the money). Since the expiry of these equity-index puts is more than a decade away -- short-term movements in the indices shouldn't be a cause for concern. 2) he keeps insinuating that BRK/Buffett is facing margin calls when Buffett has been explicit on these particular put options. The 10-Qs explicitly state that BRK does not have to post collateral against these puts even if Berkshire Hathaway is downgraded and loses its AAA rating. The article and author can be ignored. wabuffo

I would echo Ben's assertion that the Morningstar "burn-down" analysis was plagarized from another public board. Its shameful that the Morningstar "analyst" didn't acknowledge his source. Very un-cool. wabuffo