‘LEFT FOR DEAD’: Wells Fargo could SHOCK Wall Street as expectations sink

EARNINGS. LAST WEEK MY NEXT GUEST PUBLISHED A NOTE TITLED HOW TO INVEST BANKS FROM HERE. UBS MANAGING DIRECTOR LARGE-CAP BANKS AND CONSUMER FINANCE, ERIKA. I TRIED TO GET -- NO, TALK ABOUT THE BANKS, WHO GOT THE BEST WHEN IT COMES TO BANKS BUT WHEN I FIRST SAW THE HEADLINE, IT FELT RHETORICAL BUT THIS IS S SERIOU. WE'VE ALREADY SEEN WHEN YOU MAKE BIG RUNS, IT'S HARD TO IMPRESS PEOPLE. >> JUST LIKE STEPHEN SAID, IT'S SPOT VERSUS THE FUTURE, EVERYBODY EXPECTS BLOWOUT EARNINGS, MAKE EARNINGS FROM THE MEGA CAP BANKS TOMORROW BUT NOW, WHAT YOU DO GOING FORWARD? WAS THE LENGTH OF THE CAPITAL MARKET SUPER CYCLE? I THINK THE OUTLOOK FROM THESE COMPANIES IN TERMS OF HOW MUCH MORE IS THAT, CAN WE STAY IN THIS SUPER CYCLE, ESPECIALLY SINCE ASIA IS A HUGE PART OF THE EQUITIES NUMBER? I THINK THAT WILL BE IN THE SPOTLIGHT, CAN YOU KEEP THE MOMENTUM GOING? >> DIRECT LOAN GROWTH, ZOOMER RESILIENCE. CONSUMER RESILIENCE, HIGHER OIL AND GAS AND OTHER INFLATIONARY PRESSURE, THEY KEEP COMING THROUGH. >> THEY ARE NOT IN THE SPOTLIGHT THIS WEEK BUT WE HAVE SOME SORT OF STABILIZATION TERMS OF THE MIDDLE EAST, SENTIMENT CAN PICK UP FROM CARD STOCKS, CAPITAL ONE, AMERICAN EXPRESS, RELATIVE TO THE CAPITAL MARKET AND IF THE CONSUMER CAN STAY RESILIENT, THE MULTIPLES ARE LIKE TEN TIMES. NOT QUITE THAT LOW, BUT YOU COULD VALUE FISH IN THE CONSUMER FINANCE NAMES. >> DEREGULATION COMING IN, DOES IT STILL MATTER? IS IT STILL CHANGING THE GAME SO TO SPEAK? >> IT'S CHANGING THE GAME IN THE SPOT AND FOR THE FUTURE. RIGHT NOW IT TAKES A LOT OF BALANCE TO FACILITATE THAT MARKET, IT TAKES A LOT FOR THEM TO MEET THE DEMAND IN TERMS OF TRADING HERE IN THE U.S. SO NOT ONLY CAPITAL FREED UP ALSO FOR THE FUTURE YOU THINK ABOUT FUTURE EXCESS CAPITAL TO GENERATE MORE EARNINGS GROWTH. >> BIG THANKS HAD A NICE MOVE, CITY OF THE TOP AND WELLS HAS STRUGGLED A BIT AND APPLY ON J.P. MORGAN AND BANK OF AMERICA AND MORGAN STANLEY, WHAT SETS THEM APART? >> J.P. MORGAN HAS BEEN A PERFORMER. I THINK EARNINGS MIGHT BE CLOUDED BY THIS DISCUSSION. MORGAN STANLEY IS BEST IN CLASS IN TERMS OF RETURNS, IT IS A VALUE PLAY AND WELLS FARGO HAS BEEN A VALUE PLAY. WELLS FARGO HAS BEEN LEFT FOR DEAD AND THE NAME OF THE SHOW IS MAKE MONEY WITH CHARLES PAYNE, I WOULD SAY WELLS FARGO. >> WAS FULL OF A CHART TO UNDERSCORE THIS DISTINCTIVE CHART OF WELLS FARGO BY ITSELF BECAUSE IT FEELS LIKE IT'S -- THEY HAD A LOT OF SCANDAL, THERE'S A LOT OF CONFUSION TALK BUT IT'S SOMETHING THIS YEAR WHEN THE REST HAVING -- IN YOUR MIND IT'S SET UP PRETTY GOOD FOR ANY POSITIVE SUPPLIES THAT TAKE OFF. >> WITH A CHART TELLS ME IS THE BAR IS ON THE FLOOR IN TERMS OF EARNINGS EXPECTATIONS, AND INVESTORS BELIEVE IS A PROBABILITY THEY MISS AND I THINK THEY REITERATE THEIR THAT BUT I THINK YOU GET A LITTLE BIT OF A CAP MARKET SURPRISE HERE SO WELLS FARGO IS MORE OF A BALANCE SHEET AND THE OTHER BANKS BECAUSE THEY ARE NOT HUGE IN ASIA SO THEY MIGHT SURPRISE THE UPSIDE IN TERMS OF BALANCE SHEET GROWTH AND TRADING IN THE U.S. >> A LOT OF TALK THIS WEEK AND EVERYONE IS TRYING TO FIGURE OUT WHO HE IS AND WHAT HE IS, HOW ARE YOU STARTING TO INCORPORATE, THINK OF THE WORSHIP FED VERSUS POWELL SAID? >> PUT A RATE HIKE IN FOR DEDECEMBER AND THAT IS LESS TO O WITH IT ALTHOUGH IT'S IS BELIEVING IN HIS CREDIBILITY IS THAT CHAIR RATHER THAN A POLITICAL FIGUREHEAD AT THE INFLATION DATA AND CONFLICT IN THE MIDDLE EAST LET US TO PUT THE RATE HIKE AND BUT THE RATE HIKE IS NOT NECESSARILY GOOD FOR ALL BANKS, IT COULD BE REGIONAL BANKS SO THAT'S WHAT'S CHANGED. >> I GAVE YOU A HARD TIME LAST YEAR, A COUPLE OF TIMES WHEN THE BANKS LOOKED A