Wednesday, August 15, 2007

Countrywide Cut by Merrill; Bankruptcy Seen Possible

From Bloomberg:

Aug. 15 (Bloomberg) -- Countrywide Financial Corp., the biggest U.S. mortgage lender, was downgraded to ``sell'' by Merrill Lynch & Co., which raised the possibility of bankruptcy if the company loses access to short-term financing.

``We cannot understate the importance of liquidity,'' Kenneth Bruce, a Merrill analyst in San Francisco, said in a research note today. ``Effective insolvency'' would result should creditors force Countrywide to sell assets at depressed prices or investors lose confidence in its ability to raise cash, he wrote.

``If liquidations occur in a weak market, then it is possible for CFC to go bankrupt,'' said Bruce, who had rated Countrywide a ``buy'' since April 2005, according to data compiled by Bloomberg. Countrywide trades under the ticker CFC.


Rob Dawg said...

One of the most expensive REOs in Countrywide's inventory is just a short way across the golf course from the world famous "Dawg Pound." I think it might be worth $450k, big house, big lot, privacy but not on the golf course and no significant views. No matter what though Countrywide isn't going to sell it for less than $1m and a firesale would still fetch $800k or more. There's still greater fools out there just at a lower price point. That's okay, some of these have to sell for $800 and then $600 before I can get mine next one for $450. There's a market clearing force on the way down just like on the way up.

Raynor said...

I still see <$100 psf before prices in San Joaquin Valley level out for single family dwellings.

As in every market disruption, good things come to those who wait (i.e. CAN wait -- i.e. have $$ saved!)

Fortunes will be made in the next few years in this market turmoil.

I just hope some of the benefits do not ennure to those who helped cause it!

WaitingToBuy said...

I'm waiting!

Raynor said...

Anyone heard this over on bakersfield blogs?

Too funny!

Too True!

Bon Jovi Remax Magic?

Raynor said...


truncated it for some reason

Bakersfield Bubble said...

Yes - someone sent it to me.

It is very funny!

Raynor said...

This John Vaughn character however, I envision as a one trick pony. He is getting a radio show of his own.

I hope its a whole lot better than he came off on Kern Saturday.

And he keeps calling the "straw buyers" innocents. I might buy naive but not innocent!