Were Wells Fargo (WFC) Earnings Worse Than They Seemed?

Critics have started to come out of the wall and say that Wells Fargo’s (WFC) earnings are not as good as they seemed at first blush.

The most stunning comments come from  KBW Inc.’s Frederick Cannon. According to Bloomberg, “KBW expects $120 billion of `stress’  losses at Wells Fargo, assuming the recession continues through the first quarter of 2010 and unemployment reaches 12 percent, Cannon wrote today in a report. The San Francisco-based bank may need to raise $25 billion on top of the $25 billion it owes the U.S. Treasury for the industry bailout plan, he wrote.”

According to The Wall Street Journal, Here was the analyst from Friedman Billings Ramsey said: “Based on everything we know about credit deterioration, we are skeptical…under-provisioning may come back to haunt Wells Fargo in later quarters.”

Douglas A. McIntyre