Dayton Business Journal - by Mark Calvey DBJ Contributor
Wells Fargo CEO John Stumpf said today the nation’s credit crisis has turned into a crisis of confidence.
In comments at the San Francisco Chamber of Commerce’s annual “CityBeat” lunch, Stumpf compared the current circumstance to the Great Depression in the lasting imprint it will leave on those who lived through it.
“I don’t know what we’re going through today, but it will probably define our generation,” he said.
Paraphrasing investor Warren Buffett, he said the economy is controlled by the three I’s: Innovation, imitation and “idiot-zation.” The length of the downturn, he said, will be determined by the length of the “idiot-zation” phase. He didn’t say whether we are still in that phase or not.
As Stumpf was speaking, stock in San Francisco-based Wells (NYSE: WFC) and other banks were falling sharply on fears that large banks — led by Bank of America (NYSE: BAC) and CitiGroup (NYSE: C) — could be nationalized as the federal government struggles to stabilize a financial cataclysm that has swept across much of the world. For the day, Wells stock was down 9.16 percent to close at $10.91. Citigroup plunged 22.31 percent to finish at $1.95. Buoyed by a late rally, BofA fell 3.56 percent to end at $3.79.
Approached afterward, Stumpf refused comment on the nationalization issue or to add to his prepared remarks.
In his remarks to the audience, Stumpf said that today's economic challenges could spur great achievements, much like the Golden Gate Bridge was built during the Great Depression.
Among the possible achievements he listed were clean energy, infrastructure and the environment. “We could be the next great generation,” he said.
“We’re a nation of optimists,” Stumpf added. “The most optimistic of the optimists came west.”
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