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Posted
Oct 26 2007, 10:13 AM
by
Matt Koppenheffer
Rating:
Money Blog: Top Stocks Blog - MSN Money
Countrywide Financial may have lost $1.2 billion during its third quarter, but as we all know, Wall Street is always looking to the future. So what's in the cards for Countrywide going forward? According to Countrywide's President, profitability. He said that after swallowing its first quarterly loss in the past 25 years, Countrywide expects to be back in the black next quarter.
Investors are going bananas over the projection for next quarter, and as of this writing the stock is up almost 17% on the day.
Players on The Motley Fool's CAPS don't seem quite as convinced. At one star, the stock is at the bottom of the barrel as far as CAPS ratings go. The projections for next quarter didn't seem to help much -- 34 of the 47 new players to rate Countrywide today were bearish on the stock. One CAPS player, devoish, warned that he "[believes] there is more bad news coming beyond just today's layoffs and writedowns."
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Posted
Dec 18 2007, 04:55 PM
by
Charley Blaine
Rating:
Money Blog: Top Stocks Blog - MSN Money
Here's hoping that, in the aftermath of the subprime-mortgage mess, someone comes up with some standard provisions for adjustable-rate mortgages that apply equally across the country, that everyone understands and that regulators actively and aggressively enforce.
Otherwise, we'll have to go through the subprime mortgage crisis a third time.
A third time? Yes, indeed. It seems to me that the subprime mortgage mess was created by a lot of people with short memories or no memories.
In the early 1980s, as mortgage rates were jumping, the mortgage industry came up with a lot of new mortgages designed to make housing affordable. Many were just as goofy as the weird mortgages we've seen lately as the subprime crisis deepens. In fact, they look like old ideas, dusted off to solve a slightly different problem: how to deal with gigantic price increases.
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Posted
Jan 11 2008, 01:58 PM
by
Matt Koppenheffer
Rating:
Money Blog: Top Stocks Blog - MSN Money
The best person to ask would be Ken Lewis, CEO of Bank of America, since B of A went ahead and announced an agreement to buy Countrywide for roughly $4 billion, or $7 per share.
Ken is a bit busy, though so I'll go ahead and tackle it. Here are three scenarios from most to least optimistic:
- Countrywide's stock has been beaten down so far that Bank of America could no longer resist buying a valuable asset at a price well under its true value. Plus, B of A sees the opportunity to build its mortgage lending arm and lower borrowing costs for Countrywide.
- Having already sunk $2 billion into Countrywide, B of A decided that it'd rather take matters into its own hands than continue to watch the value of its investment sink.
- And finally (tip of the hat to Herb Greenberg on this one), Countrywide was really on the edge of bankruptcy and the Federal Reserve got into the mix by pushing for the deal and offering government backing for any losses from Countrywide.
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Posted
May 06 2008, 01:06 PM
by
Matt Koppenheffer
Rating:
Money Blog: Top Stocks Blog - MSN Money
After Countrywide's ugly $890 million first quarter loss, speculation has been rampant that Bank of America will try to pull a Houdini and wiggle out of its agreement to buy the mortgage lender. Speculation took to new heights this week when Friedman, Billings, Ramsey analyst Paul Miller strongly cautioned BofA against the deal, and suggested that the bank may try to renegotiate the price down to the $0 to $2 per share level.
The question at hand here really isn't whether Countrywide is going to suck for the foreseeable future -- despite what CEO Angelo Mozilo said late last year, that's pretty much a given. The issue is whether Countrywide will suck more than BofA's proposed buyout price suggests. Since BofA's original buyout offer was at about $4 billion, it's possible that it's already expecting at least another $9 billion hit to Countrywide's book value. That would assume a buyout at one time projected book value, which would be relatively cheap given Countrywide's trading history.
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Posted
May 22 2008, 10:26 AM
by
Matt Koppenheffer
Rating:
Money Blog: Top Stocks Blog - MSN Money
Earth to Angelo: learn to use your email!
Maybe the fact that Countrywide CEO Angelo Mozilo hit "reply" rather than "forward" when typing his "disgusting" heard-round-the-world email isn't all that outlandish. After all, if you google "email blunder" you get well over a million hits -- most of them telling embarrassing stories of how a mistyped or misaddressed email put the sender in a precarious position.
But of course this isn't any Tom, Dick, or Harry who has sent an email to his boss accidentally disclosing that he's still drunk from the night before. This is the chief executive of a multi-billion-dollar company that is embroiled in controversy, about to go to trial, and trying to make sure a proposed takeover doesn't fall apart.
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Posted
Aug 19 2008, 11:11 AM
by
Minyanville
Rating:
Money Blog: Top Stocks Blog - MSN Money
Of late, “What will happen to Freddie Mac and Fannie Mae preferred shareholders?” and “What will happen to Countrywide debtholders?” seem to be the most pressing questions on the minds of credit market participants.
Given the magnitude of the credit losses both incurred to date and yet to be incurred, I believe market participants would be far better served by spending more time trying to figure out how these losses will be allocated and far less time trying to project whether those losses will total $500 billion, a trillion or even $2 trillion
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Posted
Feb 02 2009, 04:08 AM
by
Douglas McIntyre
Rating:
Money Blog: Top Stocks Blog - MSN Money
Some communicable diseases can be traced back to what medical researchers call "patient zero", the first carrier of an illness and often someone who has no symptoms. One of the most notorious examples of this is "Typhoid Mary", Mary Mallon, who is alleged to have spread typhoid fever in New York City and its suburbs between 1901 and 1906.
The global recession has a "patient zero", a single person who set off the series of events which may lead the economy into its greatest downturn since The Great Depression and, by some estimates, push 50 million people around the world out of jobs this year, according to The International Labour Organisation.
"Patient zero" bought a house in Stockton, California, in 2003 after getting a subprime mortgage. He defaulted on that mortgage 39 months later.
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Posted
Jul 30 2009, 09:32 AM
by
James Dlugosch
Rating:
Money Blog: Top Stocks Blog - MSN Money
Does Wall Street have no soul?
Certainly there seems to be no shame, as evidenced by Thursday's initial public offering of shares for PennyMac Mortgage Investment Trust.
PennyMac is the brainchild of former executives of failed mortgage giant Countrywide Financial, Bloomberg reports. Chief Executive Officer Stanford Kurland, 57, was president and chief operating officer of Countrywide Financial.
Yes, that's the same Countrywide that was brought down by subprime loans and other risky practices. PennyMac makes its money trying to clean up the housing crisis Countrywide helped create.
Give me a break. I actually had to read the news twice because I could not believe my eyes.
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Posted
Sep 02 2009, 12:03 PM
by
Minyanville
Rating:
Money Blog: Top Stocks Blog - MSN Money
This article is written by Minyanville's Quint Tatro
Many of you will recall my bearish view of the utility stocks in the beginning of this year. While the trade took quite a bit of patience, it paid off handsomely. Well, we may be seeing a repeat of the trade that I want to bring to your attention. Several charts have started popping up on my grid, and with the current market weakness, I would be amiss to not follow the money flow. While typically not your market movers or high-volume leaders, utility stocks are showing some bearish characteristics that a wise trader might want to invest a dime in and investigate further. I’ll use daily charts to highlight current movement, as traders may want to capitalize on opportunities in conjunction with the current broad market weakness. FPL Group
The Trade: Short FPL on break of neckline at 55. Click here to see chart. A chart that has struggled for months has been FPL Group (FPL). Bouncing around in the high 50s trying to gain traction, market internals have finally wrestled FPL into submission, making the current setup a possible shorting candidate.
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Posted
Oct 05 2009, 08:23 AM
by
Jim Van Meerten
Rating:
Money Blog: Top Stocks Blog - MSN Money
Over the weekend, McClatchy Newspapers had two powerful articles entitled "Help with mortgages is difficult to come by" and "Some firms with spotty pasts get tax dollars." The articles expose how firms like Bank of America (BAC), Citigroup (C) and Morgan Stanley (MS) -- firms who were bailed out from the brink of bankruptcy by TARP with billions of taxpayer dollars -- are now abusing mortgage borrowers who are in trouble. The Treasury is doing little, if anything to monitor the situation.
In one case, Ronnie Fruia was about to lose his home when he, his mother and son were all hospitalized. He was recovering from a stroke and couldn't talk, but CitiFinancial sent someone to his hospital room to sign modification papers that didn't even cut his interest rate. State regulators had to step in to get his rate changed from 11.5% to a reasonable 5%.
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