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Bank of America buoys Countrywide

quote:

Countrywide Financial, the biggest U.S. mortgage lender, sold $2 billion in preferred stock to Bank of America to bolster its finances amid the nation's worst housing slump since the Great Depression. AdvertisementBank of America, the second-biggest U.S. lender, bought stock that yields 7.25 percent and can be converted into common shares at a price of $18, Calabasas-based Countrywide said in a statement yesterday. The cash will help Countrywide keep making loans and might reassure investors after a week of tumult for the company and the housing market. On Aug. 15, a Merrill Lynch analyst predicted a cash shortfall might force Countrywide into bankruptcy, and the next day Countrywide had to tap $11.5 billion in emergency financing when creditors curtailed its access to short-term debt. The company is getting �a vote of confidence from a deep-pocketed partner,� said Sean Egan, managing director of Egan-Jones Ratings in Haverford, Pa. �We'd get a lot more comfort if it was $5 billion or $10 billion, but we'll take what we can get.�

We'll see how much comfort this brings them.

quote:

Originally posted by djGT Bank of America buoys Countrywide We'll see how much comfort this brings them.

makes me wonder if b of a will ultimately buy them out

i'd hate to see them do that because b of a is my favorite bank to do loans with and it'd be such a risk to them, i don't care if they have 1.2 trillion in assets...

quote:

Originally posted by ninetyninej makes me wonder if b of a will ultimately buy them out

It's a possibility.

Countrywide CEO: Mortgage Crisis Persists Despite BofA Stake

quote:

"Eventually I think they'd be looking to acquire the whole firm," said Ganesh Rathnam, a Morningstar analyst who covers Bank of America. "I don't see why they would otherwise buy $2 billion into it." Bank of America probably could not acquire Countrywide outright for a while. The bank's pending acquisition of LaSalle Bank from ABN AMRO would push it up against a 10% federal cap on deposits. Buying the operator of Countrywide Bank would probably push it over.

California�s Housing Remains Nation�s Least Affordable

quote:

Robert Rivinius, CBIA�s President and CEO, said the fact that affordability has not increased despite a housing downturn that has lasted over a year is ample proof that prices aren�t likely to drop significantly, which means families that can afford to buy should consider doing so now, before prices and interest rates start to climb again. He also said that policy-makers should recognize that market corrections alone are not likely to allow the hundreds of thousands of Californians priced out of homeownership to be able to buy their first homes. �Housing costs in California are driven by supply and demand. Because the supply of new homes hasn�t kept pace with the demand caused by a rapidly growing population, prices have climbed sharply over the years,� Rivinius said.

So with increasing interest rates, the prices will go up as well? Buy now or be priced out forever! Oh look, there goes Robert with his nice commission check! Damn I want what he's smoking!

quote:

Originally posted by djGT California�s Housing Remains Nation�s Least Affordable So with increasing interest rates, the prices will go up as well? Buy now or be priced out forever! Oh look, there goes Robert with his nice commission check! Damn I want what he's smoking!

http://www.careerbuilder.com/monk-e...=22960571&cbRec

this skit sums it up

quote:

Originally posted by ninetyninej this skit sums it up

For people from the Sacramento area, you can check out this blog.

http://sacramentolanding.blogspot.com/

COUNTRYSLIDE MORTGAGE LENDER'S SHARES PLUNGE; SEEKS 2ND BAILOUT

quote:

September 11, 2007 -- Countrywide Financial Corp. is putting together another multi-billion dollar bailout plan as the nation's largest home lender continues to struggle amid the global credit crunch and declines in the housing market, The Post has learned. Sources familiar with Countrywide's plans said the lender continues to work with Goldman Sachs and law firm Wachtell Lipton Rosen & Katz to structure another strategic investment similar to the deal Bank of America struck last month. It's unclear at this point who exactly is involved in the investment, but sources said a group that could include J.P. Morgan and Citigroup as well as several hedge funds has expressed interest in Countrywide. A final deal could be announced by the end of the month, sources said. Last month, Bank of America paid $2 billion for a new series of non-voting preferred stock in Countrywide, which provides an annual dividend of 7.25 percent and can be converted into common stock at $18 per share. As part of the deal, Countrywide left the door open to issue additional preferred stock or convertible preferred stock. "Countrywide is in desperate need of cash right now to continue funding mortgages and the credit markets are still largely closed to them," said one source familiar with the company. Countrywide's chief executive Angelo Mozilo, who announced plans last week to eliminate as many as 12,000 jobs, said recently that interest rate cuts by the U.S. Federal Reserve won't be enough to revive home sales and warned that the U.S. economy is headed for a recession. "The issues the economy is facing are worse than most people believe," Mozilo said in an interview last Friday with Bloomberg News. Mozilo has been pushing for the government to allow Fannie Mae and Freddie Mac to finance bigger home loans. Countrywide, which handles one of every five new U.S. mortgages, has been hurt by falling home prices and record foreclosures. The company has billions in medium-term debt coming due in about 90 days and needs to cash to continue operating. Countrywide's stock plunged by over 5 percent yesterday after analysts at Merrill Lynch and UBS cut their profit estimates on worries over the company's ability to make new loans. The stock, which has fallen over 59 percent this year, closed at a four-year low of $17.21 yesterday. Making matters worse, Alliance Capital Management, which is owned by giant French insurance company Axa SA, disclosed that it has sold about 31 million shares of Countrywide in the last month. Barclays Global Investors has also sold nearly 25 million shares. "We think the stock will continue to drift down, as investors lose hope of a near-term recovery," said Merrill analyst Kenneth Bruce. He estimates that the job cuts could save Countrywide roughly $1 billion a year, but that will only offset lower revenues.

Looks like someone needs another helping hand. Oh yeah, and more jobs go bye-bye!

quote:

Originally posted by djGT COUNTRYSLIDE MORTGAGE LENDER'S SHARES PLUNGE; SEEKS 2ND BAILOUT Looks like someone needs another helping hand. Oh yeah, and more jobs go bye-bye!

yeah i have about a dozen friends that work with countrywide in either wholesale or retail (internet-dedicated).

the guidelines changes, massive increase in rates, and guaranteed lay offs in the next couple months have them all searching for new jobs.

angelo mozilo = Enron + WorldCom put together, that guy has a lot coming to him.

...but in the end bank of america will absorb the company at a steal due to the terms of their preferred stock agreement that came with the $2billion investment they made 2 weeks ago. i predict this will happen in the next 3-6 months at which point countrywide will have shaved off 12,000 to even 20,000 jobs (1/3 the company) and their stocks trading at $10 a share, give or take.

here is a couple links proofing that there is nothing that can prevent next year's recession (not Bush's FHASecure bill or his bill to abolish IRS Debt Forgiveness in which people won't get 1099s taxing them on the difference on the short sale of their homes).

oh, and all the gov't and realtor 'guesses' that this will all be over soon are BS to get you to buy into the market, both stocks and real estate, this shit won't be over for yearssssssss:

http://today.reuters.com/news/artic...RVEY-URGENT.XML

http://bloomberg.com/apps/news?pid=...Fjqk&refer=home

quote:

Originally posted by ninetyninej oh, and all the gov't and realtor 'guesses' that this will all be over soon are BS to get you to buy into the market, both stocks and real estate, this shit won't be over for yearssssssss:

Never trust someone whos commission is based on them not knowing. Good luck to your friends.

Oh yeah, Florida is probably already in a recession.

Countrywide leaks firing hit list to employees (Video clip)

Any of your friends get that email?

quote:

Originally posted by djGT Countrywide leaks firing hit list to employees (Video clip) Any of your friends get that email?

damn that sucks, nah they didn't but this chic i know in prime wholesale went on a conference call at lunch time and found out 230 people in our region were being canned and today would be their last day. my friend kept her job and so did most of my friends that work at full spectrum (countrywide retail)

i need to make a logo of Calvin pissing on Countrywide's name and logo, i'd make a shit load of money

WOW..
so how long until we see a Countrywide documentary?
"the rise and fall of Countrywide"

quote:

Originally posted by MR STROKE WOW.. so how long until we see a Countrywide documentary? "the rise and fall of Countrywide"

yeah, it will be like the documentary for ENRON corruption, insider trading, fucking employees 401Ks, etc.

mortgageimplode.com had a running joke of changing countrywide's name to LENDRON

OLD:



NEW:

quote:

Originally posted by ninetyninej yeah, it will be like the documentary for ENRON corruption, insider trading, fucking employees 401Ks, etc. mortgageimplode.com had a running joke of changing countrywide's name to LENDRON OLD: NEW:

This is too Funny!!!!

quote:

Originally posted by JSmooth619 This is too Funny!!!!

except for the employees.

and everyone else having to pay for higher cost of living due to all this inflation.

got milk?

just found a new blog concentrating on south OC, check it out:

http://caliguy2699.blogspot.com/

quote:

Originally posted by djGT except for the employees. and everyone else having to pay for higher cost of living due to all this inflation. got milk? just found a new blog concentrating on south OC, check it out: http://caliguy2699.blogspot.com/

Yeah it does suck, I used to work for a mortgage broker and one day I went to the office as usual but my key didn't work I peeked through the window nothin' but carpet, apperantly he closed the office and didn't tell any of his employees one by one we started showing up, later on that day he called us individually and gave us the bad news.

good sign?

http://biz.yahoo.com/ap/070918/wall_street.html?.v=28

0.5% rate cut...WOW, didn't think they would go that low

quote:

Originally posted by MR STROKE good sign? http://biz.yahoo.com/ap/070918/wall_street.html?.v=28 0.5% rate cut...WOW, didn't think they would go that low

what do you think the results of this will be... i the stock market was going crazzzzzzyyyyyyyyyy... but what about the long run??

quote:

Originally posted by 72hrpartyanimal what do you think the results of this will be... i the stock market was going crazzzzzzyyyyyyyyyy... but what about the long run??

the economy will suffer with out liquidity and when theres no liquidity in real estate, there's very little spending money from most of americans. so the fed basically said, inflation is good right now but liquidity sucks, so we're willing to risk higher inflation for more liquidity.

I think there will probably be more rate cuts in the future too. I wish greenspan would shut his mouf too, he is being such a media slut these days. (not to knock his fed career or anything...)

quote:

Originally posted by Zombie0729 the economy will suffer with out liquidity and when theres no liquidity in real estate, there's very little spending money from most of americans. so the fed basically said, inflation is good right now but liquidity sucks, so we're willing to risk higher inflation for more liquidity.

higher inflation right now, means "we be broke" later!

right??

quote:

Originally posted by 72hrpartyanimal higher inflation right now, means "we be broke" later! right??

"we be broke" now and "we be more broke" later.

quote:

Originally posted by djGT "we be broke" now and "we be more broke" later.

yeap

feds should know dropping the rate only postpones the inevitable and actually increases inflation, which will cause for an even more devastating recession :<

....but this does make for more liquid and better a-paper conforming rates which increases my business (which i really needed!)

in the end though the 'credit bubble' will burst along with 2.4 million people that face foreclosure next year, dragging property down another 20%. this is a fact the whole country has to face and will affect almost all areas of the economy. the feds can't stop the recession they can only ease the air out of the bubble. the next few years are going to be very hard.

and to think we all have to pay long and hard for a housing boom that made only a small percentage of the country rich (ie, mortgage lenders, hedge funds, brokers, realtors, etc) and was caused by Greenspan lowering the rates way to low (down to 1% in 2003 and was unnecessarily low because the economy and stock market already rebounded from 9/11) and himself along with the entire federal reserve and rating agencies asleep at the wheel while unregulated hedge funds and 'mortgage lenders' popped up like wild fire and raped the equity of America, most of which was done with illegal and unethical practices.

...and to top it all off, this subprime greed is dragging soooo many countries down with us:

"Debt storm likely to head west and engulf Japan"

http://www.telegraph.co.uk/money/ma.../15/ccom115.xml

/me pisses on greed.

speaking of greed, angelo mozilo (countrywide ceo) was in the news announcing that every employee selling subprime is fucked (along with a handful of friends of mine):

Countrywide CEO says "out" of subprime business
(reuters.com)

2007-09-18

"We are out of the subprime business," Mozilo said at a Bank of America investment conference in San Francisco. "The only subprime loans that Countrywide will originate will be GSE-eligible, period." -- How noble and prudent of Mozilo to get out of subprime when they can no longer fund the loans...

http://www.reuters.com/article/bank...WEN105420070918

as for the stock market, its very high stakes right now meaning if you put in and pull out of the right stocks you can make a buck but in the long run you will be fucked. leaving your money in or investing in the stock market is as good as burning it.






EDIT:

oh God, just as i post this i read the following on mortgageimplode.com:

House approves bill helping mortgage borrowers
(marketwatch.com)

2007-09-18

Here you have it, folks. The plan is to re-fi borrowers out of unsustainable loans into what will effectively be government subprime loans (and keep inflated home values going a little longer). The new limits will be 0-down; up to $730k for FHA backing. The general public will pay dearly for this. We are blown away by the gall and stupidity of this move. Intervention was the poison; and we are to believe that more intervention (towards the same end) is also the cure.

http://www.marketwatch.com/news/sto...91DFE996EDBC%7D


wtf is the gov't thinking, i know there are over 2 million facing foreclosure in the next year or so but lets not inadvertently throw us into the next great depression just to throw them a lifeline and drag the over inflation on longer





EDIT 2:

as if this post wasn't long enough, i thought i'd throw in the fact that the value of the dollar is getting demolished with the fed rate cuts:

Dollar Gets Slammed on Rate Cut
(fxstreet.com)

2007-09-18

"The dollar sank versus the euro, but surged against the yen, after the Fed cut rates by 50 bps, to stem economic pressures from a struggling housing market and alarming credit problems"

http://www.fxstreet.com/technical/m...2007-09-18.html

oh and /me pisses on the federal reserve too

ron paul pwns.



Ron Paul's Bay Area Rally Part 1 & 2





Ron Paul @ Google



/political-rant

I hope we don't end up like Japan's housing bubble who's bubbly is still popping after 15 years. Their government even tried to lower interest rates as much as .5% but a bad loan was still a bad loan.

Oh look, the DOW is reaching 14k again.

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