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Countrywide Crushed Again (Lost another 16% of their stock value to Ditech)
http://www.thestreet.com/s/countrywide-crushed-again/newsanalysis/banking/10373527.html?puc=_dm ^ | 8-10-07

Posted on 08/10/2007 5:53:06 AM PDT by Hydroshock

Countrywide (CFC - Cramer's Take - Stockpickr - Rating) plunged 16% in early trading a day after the struggling mortgage lender warned in a regulatory filing that mortgage market disruption could hurt the company's financial condition.

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"Since the company is highly dependent on the availability of credit to finance its operations, disruptions in the debt markets or a reduction in our credit ratings could have an adverse impact on our earnings and financial condition, particularly in the short term," Countrywide said in the risk factors section of a filing made late Thursday.

Countrywide shares have been tumbling since problems with the subprime mortgage market came to light back in February. The stock hit a 52-week high of $45 just before rivals like HSBC (HBC - Cramer's Take - Stockpickr), New Century (NEWCQ - Cramer's Take - Stockpickr) and NovaStar (NFI - Cramer's Take - Stockpickr - Rating) said they would take big losses on loans gone sour to homeowners with poor credit histories. New Century subsequently filed for Chapter 11 bankruptcy.

Countrywide dropped as low as $23 Monday amid worries about the health of the credit markets before bouncing back during a widespread market rally earlier this week.

Shares fell $4.61 early Friday to $24.05.


TOPICS: Business/Economy; Miscellaneous; News/Current Events
KEYWORDS: countrywide; hsbc; mortgage; stocks; wallstreet
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Maybe now they will stop spaming my mail box with flyers.
1 posted on 08/10/2007 5:53:08 AM PDT by Hydroshock
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To: Hydroshock

No, now they will INCREASE the spam and evening phone calls from India wanting to sell you a new mortgage!.............


2 posted on 08/10/2007 5:56:13 AM PDT by Red Badger (All I know about Minnesota, I learned from Garrison Keilor.............)
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To: Hydroshock

3 posted on 08/10/2007 5:57:43 AM PDT by andy58-in-nh (There are two kinds of people: those who get it, and those who need to.)
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To: Hydroshock
The Feds are stepping in the market with 19 Billion. This may calm the market somewhat.

Fed Accepts $19 Bln In 3-Day RPs

Last update: 8/10/2007 8:29:28 AM

Type of transaction: 3-Day RPs

Total accepted: $19 Bln

Total submitted: $31.2 Bln

Mortgage-Backed Collateral Operations

Total accepted: $19 Bln

Total submitted: $31.2 Bln

Stop-Out Rate: 5.15%

Weighted Average: 5.24%

High-rate submitted: 5.35%

Low-rate submitted: 4%

(Data was provided by the New York Federal Reserve Bank).

4 posted on 08/10/2007 6:00:09 AM PDT by Orange1998
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To: Hydroshock

Not surprising really, just hope the government doesn’t do something stupid and bail them out.


5 posted on 08/10/2007 6:01:20 AM PDT by Hawk1976 (747 superliners crashed into the WTC on 9/11, Steny Hoyer told me so on 8/7/07.)
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To: Orange1998

Calm them for how long? In the next 12 months a heck of a lot of arms will reset.


6 posted on 08/10/2007 6:03:21 AM PDT by Hydroshock ("The Constitution should be taken like mountain whiskey -- undiluted and untaxed." - Sam Ervin)
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To: Hawk1976

We saw part of the bail out yesterday. The ECB and the Fed stepped in and flooded the market with money.


7 posted on 08/10/2007 6:04:48 AM PDT by Hydroshock ("The Constitution should be taken like mountain whiskey -- undiluted and untaxed." - Sam Ervin)
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To: Hydroshock

What does this mean for those of us with countrywide mortgages?


8 posted on 08/10/2007 6:10:26 AM PDT by Gabz (Don't tell my mom I'm a lobbyist, she thinks I'm a piano player in a whorehouse)
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To: Hawk1976
Not surprising really, just hope the government doesn’t do something stupid and bail them out.

Amen to that. This is starting to look like a repeat of the S&L bailout of years ago. Those companies that jumped into the subprime market in a big way did so because the rates they could charge were higher than they could earn in the regular mortgage market. Well, with higher returns comes higher risk. The fact they're getting hit between the eyes right now with a 2x4 is the economic equivalent of thinning the herd. Not my problem...not the gov'ts problem.

9 posted on 08/10/2007 6:11:54 AM PDT by econjack
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To: Hydroshock

The chairman and chief executive of mortgage lender Countrywide Financial Corp. exercised options for 92,000 shares of common stock under a prearranged trading plan, according to a Securities and Exchange Commission filing Wednesday

In a Form 4 filed with the SEC, Angelo R. Mozilo reported he exercised the options for shares on Wednesday for $14.69 apiece and then sold all of them the same day for $28.74 apiece.

don’t forget the 110,000 shares from the day before and the 824,000 shares July 1st! for a net gain of $17.2 million.

I’d say that’s pretty well contained.


10 posted on 08/10/2007 6:12:16 AM PDT by Attention Surplus Disorder (When Bubba lies, the finger flies!)
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To: Gabz

We’re with them, too — I’m guessing nothing, if you have a fixed-rate mortgage. People with ARMs are going to take it in the booty, though.


11 posted on 08/10/2007 6:12:21 AM PDT by Malacoda (A day without a pi$$ed-off muslim is like a day without sunshine.)
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To: Gabz

Probably not much. My guess is that your mortgage paper has been brokered to someone else by now and, if not, it probably will be in the near future.


12 posted on 08/10/2007 6:13:50 AM PDT by econjack
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To: Gabz

Means largely nothing if you’re financed with a CFC mortgage. Keep making the payments and maybe they’ll send you a certificate or an attractive plaque!


13 posted on 08/10/2007 6:14:05 AM PDT by Attention Surplus Disorder (When Bubba lies, the finger flies!)
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To: Hydroshock

Yet Countrywide reported as of June 30 has 187B in cash. I believe they will do ok. I like Countrywide and have a mortgage with them... very conventional one.


14 posted on 08/10/2007 6:16:13 AM PDT by Strutt9
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To: Hydroshock

“UBS effective August 9 has suspended mortgage
operations. Liquidity has completely vanished in the
mortgage markets.”


15 posted on 08/10/2007 6:16:37 AM PDT by Orange1998
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To: Gabz

IT means we still have to pay our mortgages...


16 posted on 08/10/2007 6:16:50 AM PDT by stefanbatory
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To: Hydroshock

The game is played over and over and the music never stops.


17 posted on 08/10/2007 6:18:06 AM PDT by Orange1998
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To: Attention Surplus Disorder

The Fed Funds are now priced at 5.25 after adding 19 Billion. They are calming the market and can do more if they wanted. Countrywide are hinting they are in trouble so we shall see what happens. I find it odd GS and ML did not show many sub prime losses in the quarterly. Still more shakeout ahead.


18 posted on 08/10/2007 6:19:31 AM PDT by Orange1998
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To: Gabz

Countrywide has $187B in cash... as of June 30th report. They will do ok. If your not part of the subprime... wouldn’t worry too much.


19 posted on 08/10/2007 6:19:56 AM PDT by Strutt9
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To: Orange1998

That makes a lot of noise. The other shoe (size 89 boot more realistically) hanging over the brokerage houses / market now is liquidity and valuation for their Agency portfolios.


20 posted on 08/10/2007 6:21:07 AM PDT by L,TOWM ("Protesting Clinton's wars was'nt cool..." - Jeneane Garafolo, 2003)
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To: Hydroshock
We saw part of the bail out yesterday. The ECB and the Fed stepped in and flooded the market with money.

Maintaining target rates isn't a bail out.

21 posted on 08/10/2007 6:22:50 AM PDT by Moonman62 (The issue of whether cheap labor makes America great should have been settled by the Civil War.)
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To: Moonman62

Yes it is. They should have let the market sort itself out.


22 posted on 08/10/2007 6:25:59 AM PDT by Hydroshock ("The Constitution should be taken like mountain whiskey -- undiluted and untaxed." - Sam Ervin)
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To: Moonman62

Time to buy calls on the cheap........

Fed fund futures point to emergency Fed rate cut

By Steve Gelsi
Last Update: 7:56 AM ET Aug 10, 2007

NEW YORK (MarketWatch) — Fed fund future prices suggest the U.S. Federal Reserve will be forced to do an emergency inter-meeting rate cut within the next week, Merrill Lynch analyst Joseph B. Shatz said in a note to clients late Thursday. Fed Funds futures appear to be pricing in a substantial risk that the Fed may make the move after a series of recent events, including a move by the European Central Bank to inject $130 billion into banks. On Friday, the European Central Bank injected 61 billion euros ($84 billion) in a tender auction.


23 posted on 08/10/2007 6:26:47 AM PDT by Orange1998
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To: Malacoda
I’m guessing nothing, if you have a fixed-rate mortgage.

That was my guess, but I figured I would ask anyway.

24 posted on 08/10/2007 6:29:07 AM PDT by Gabz (Don't tell my mom I'm a lobbyist, she thinks I'm a piano player in a whorehouse)
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To: stefanbatory
I’m guessing nothing, if you have a fixed-rate mortgage.

Darn :)

25 posted on 08/10/2007 6:30:45 AM PDT by Gabz (Don't tell my mom I'm a lobbyist, she thinks I'm a piano player in a whorehouse)
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To: Hydroshock
This is the "calm" before the real storm.

The next year will be a wild one in the financial markets.

This may be the first time ever that drops in home values actually cause a deep recession.

A lot of folks around here are still in deep denial, but they better start paying attention--resetting ARMS (based on higher interest rates which reflect the perceived risk in the mortgage market) in the next few months will affect a lot of middle class folks with decent credit, not just the subprime market everyone is discussing.

Higher interest rates will also keep potential financially qualified buyers on the sidelines--delaying their purchases in the hope that rates come down and sellers lower their unreasonable expectations.
26 posted on 08/10/2007 6:30:47 AM PDT by cgbg (Hillary's mob has plans for our liberties--hanging fruit.)
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To: Moonman62

Yes they meet the target rate but had to flood the market to do it.


27 posted on 08/10/2007 6:31:29 AM PDT by Orange1998
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To: Orange1998
"The game is played over and over and the music never stops."

Kudos! Just the tunes and verses change. A+++

28 posted on 08/10/2007 6:32:08 AM PDT by BlabItGrabIt (Get Away from the Blind Side of Life--S.R. Vaughn)
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To: econjack
What you fail to see is that problems like this spread beyond the companies that make bad decisions. That makes it a problem of the government's concern.

And the government didn't bail out the S&L's. We covered that yesterday. The government was the insurer of S&L deposits. The government had to provide money to its insurance corporation.

29 posted on 08/10/2007 6:32:48 AM PDT by Moonman62 (The issue of whether cheap labor makes America great should have been settled by the Civil War.)
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To: econjack

Right, we don’t need any more of the “privatize the profit, socialize the risk” nonsense, that’s fascism. They took the chance let them take the lumps.


30 posted on 08/10/2007 6:33:34 AM PDT by Hawk1976 (747 superliners crashed into the WTC on 9/11, Steny Hoyer told me so on 8/7/07.)
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To: Hawk1976

The government just prints more money.


31 posted on 08/10/2007 6:36:33 AM PDT by Orange1998
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To: cgbg

....could be but I would inject two thoughts.....
1. if recession does loom the Feds are gonna lower interest rates big time.....
2. once all this shakes out, the market will price in the future credit crap and they psychology won’t play out..
.....just like in Feb when market lost 400 points on the China market loss......after that one time, it never even blushed when China went down.....the market hates uncertainty so once it has seen it before, it usually is not phased unless fundamentals are weak.....


32 posted on 08/10/2007 6:36:53 AM PDT by NorCalRepub
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To: Malacoda

ARM’s still can’t adjust beyond their parameters - i.e., the margin and index. The only way this affects ARM rates is if the indexes like MTA, LIBOR, and COFI go up, and, if anything, they’ll probably go down once all this hubbub calms down.


33 posted on 08/10/2007 6:38:33 AM PDT by RockinRight (Fred's Campaign: A hell of an opening, coast for a while, and then have a hell of a close.)
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To: cgbg
You are grossly overstating the situation. The vast majority of mortgages outstanding are fixed-rate loans. Countrywide has enough cash right now to take defaults on every single one of the ARMs it has, and that isn't going to happen. Most other lenders didn't get into the ARMs or subprime loans as heavily as Countrywide did, either. Countrywide still does the bulk of its business in Fannie Mae/Freddie Mac loans and those agencies are still buying everything they can.

People REALLY need to calm down about this situation. Investors have temporarily pulled back from mortgage-backed securities but they will be back.

34 posted on 08/10/2007 6:38:54 AM PDT by Dems_R_Losers (Thanks anyway, Nancy, but we already have a Commander-in-Chief!)
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To: cgbg

I agree...Going to get ugly soon...Hate to sound negative/pessimistic but the facts are we’ve been extremely spoiled for sometime now....The writing is on the wall as they say...The economic policies that the congress(mob) has implented years ago are starting to come to roost...Just look at the situation with China for example...The last 5-6 years anyone with a pulse got a mortgage...Somewhere down the line someone(us) got to pay for it, just the way it is I guess...


35 posted on 08/10/2007 6:41:21 AM PDT by manonfire
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To: Orange1998

Yes, that could goose the market. And better yet, Bernanke and Paulson will have to choke on their words that the subprime mess was contained.


36 posted on 08/10/2007 6:44:12 AM PDT by Moonman62 (The issue of whether cheap labor makes America great should have been settled by the Civil War.)
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To: Dems_R_Losers
The only one panicking is the ones holding the paper. Liquidity has temp dry up.
37 posted on 08/10/2007 6:45:50 AM PDT by Orange1998
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To: cgbg

“-resetting ARMS (based on higher interest rates which reflect the perceived risk in the mortgage market) in the next few months will affect a lot of middle class folks with decent credit, not just the subprime market everyone is discussing.”

Most of those people will be able to refinance into decent rates.
Some are doing it right now, others are waiting.


38 posted on 08/10/2007 6:47:19 AM PDT by HereInTheHeartland (Never bring a knife to a gun fight, or a Democrat to do serious work...)
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To: RockinRight

You’re a voice a reason buddy! ;^)


39 posted on 08/10/2007 6:47:58 AM PDT by DCPatriot ("It aint what you don't know that kills you. It's what you know that aint so" Theodore Sturgeon))
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To: Hydroshock
filing that mortgage market disruption could hurt the company's financial condition

In the real world that can be translated as, if someone don't buy our worthless paper we are going broke!

40 posted on 08/10/2007 6:48:20 AM PDT by org.whodat (What's the difference between a Democrat and a republican????)
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To: Gabz
What does this mean for those of us with countrywide mortgages?

Not much, they generate mortgages and service them, they don't hold the paper.

41 posted on 08/10/2007 6:50:09 AM PDT by org.whodat (What's the difference between a Democrat and a republican????)
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To: Gabz

one of my investment properties has a 80% fixed and 15% that is a Home Equity line with Countrywide...one of these days I’ll pay off that HELOC...give countrywide a little more cash to play with...


42 posted on 08/10/2007 6:51:08 AM PDT by stefanbatory
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To: Hydroshock

Too bad. Countrywide has always treated me right. Can’t say that for any of the others I’ve used.


43 posted on 08/10/2007 6:53:08 AM PDT by RGSpincich
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To: HereInTheHeartland
The reason I am convinced that we are headed for a major recession is that refinances have generated cash for consumers over the last few years--that economic driver just isn't going to be there in the next couple of years.
44 posted on 08/10/2007 6:53:30 AM PDT by cgbg (Hillary's mob has plans for our liberties--hanging fruit.)
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To: RockinRight
ARM’s still can’t adjust beyond their parameters - i.e., the margin and index. The only way this affects ARM rates is if the indexes like MTA, LIBOR, and COFI go up, and, if anything, they’ll probably go down once all this hubbub calms down.

How many of the ARMs' initial rates were far below their index rates, so that even if the market rates stay the same the mortgages' rates are guaranteed to go up? My first car loan was a variable one like that. The initial interest was 9% (decent for a kid still in college), then it jumped to 14% three months later because it was set to be some percentage above an index which had absolutely nothing to do with the initial 9%.

I have avoided variable rate loans since then.

45 posted on 08/10/2007 6:54:09 AM PDT by KarlInOhio (May the heirs of Charles Martel and Jan Sobieski rise up again to defend Europe.)
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To: Hydroshock

Aren’t they really, really BIG? And respectable? Like Enron? How can Ditech be cleaning their clock? I thought they were just a scam, though since they were bought by GMAC I had to figure they were a playa.


46 posted on 08/10/2007 6:56:11 AM PDT by ichabod1 ("Liberals read Karl Marx. Conservatives UNDERSTAND Karl Marx." Ronald Reagan)
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To: KarlInOhio

Most hybrid (3/1, 5/1, etc) ARMS are like that.

All I meant was what happened the last few days won’t make a 3/1 ARM that wasn’t supposed to adjust till June 2008 suddenly adjust now, nor will it take a margin of 2.25 over LIBOR and suddenly make the margin 3.5. Even ARM mortgages have contractual obligations.


47 posted on 08/10/2007 6:58:38 AM PDT by RockinRight (Fred's Campaign: A hell of an opening, coast for a while, and then have a hell of a close.)
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To: ichabod1

The “Ditech” thing is a joke, I think. I bet their stock isn’t doing that great either.


48 posted on 08/10/2007 6:59:05 AM PDT by RockinRight (Fred's Campaign: A hell of an opening, coast for a while, and then have a hell of a close.)
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To: Strutt9

Still, one reason I like being with them is because I don’t think they’re a here today, gone tomorrow sort of company. Also, a friend from church was my broker and got me a nice 6.25% rate and hooked me up with a wonderful real estate agent. But if they’re shaky it’s going to cost them in their ability to sell new loans.


49 posted on 08/10/2007 6:59:47 AM PDT by ichabod1 ("Liberals read Karl Marx. Conservatives UNDERSTAND Karl Marx." Ronald Reagan)
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To: ichabod1

Countrywide, Wells Fargo, B of A, Indymac, and Wells Fargo will all be OK. They might take a crunch, but they’ll survive just fine.


50 posted on 08/10/2007 7:02:24 AM PDT by RockinRight (Fred's Campaign: A hell of an opening, coast for a while, and then have a hell of a close.)
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