Anyone thinks a contrarian view of CFC?

[capeman]

That last post says it all. Only conforming means pretty much all 80-90% of the business they’ve been doing the last couple of years is gone. Couple that with having so many REOs on the books (many more to come!) and having to deal with the paper coming back they will be BK within 2 months and likely right about 1 month from now.

[stansd]

If they are smart, they’ll announce a huge layoff in the next few days, cease all non conforming origination (I’m sure this is done), draw down all ST financing (which they’ve done). Auction off any houses on the books immediately.

Also, don’t discount all the Private Equity vultures out there that might see this as an opportunity.

I think they’ve got a good chance of making it through.

Stan

[stansd]

If they are smart, they’ll announce a huge layoff in the next few days, cease all non conforming origination (I’m sure this is done), draw down all ST financing (which they’ve done). Auction off any houses on the books immediately.

Also, don’t discount all the Private Equity vultures out there that might see this as an opportunity.

I think they’ve got a good chance of making it through.

Stan

[stansd]

If they are smart, they’ll announce a huge layoff in the next few days, cease all non conforming origination (I’m sure this is done), draw down all ST financing (which they’ve done). Auction off any houses on the books immediately.

Also, don’t discount all the Private Equity vultures out there that might see this as an opportunity.

I think they’ve got a good chance of making it through.

Stan

[stansd]

If they are smart, they’ll announce a huge layoff in the next few days, cease all non conforming origination (I’m sure this is done), draw down all ST financing (which they’ve done). Auction off any houses on the books immediately.

Also, don’t discount all the Private Equity vultures out there that might see this as an opportunity.

I think they’ve got a good chance of making it through.

Stan

[stansd]

If they are smart, they’ll announce a huge layoff in the next few days, cease all non conforming origination (I’m sure this is done), draw down all ST financing (which they’ve done). Auction off any houses on the books immediately.

Also, don’t discount all the Private Equity vultures out there that might see this as an opportunity.

I think they’ve got a good chance of making it through.

Stan

[stansd]

If they are smart, they’ll announce a huge layoff in the next few days, cease all non conforming origination (I’m sure this is done), draw down all ST financing (which they’ve done). Auction off any houses on the books immediately.

Also, don’t discount all the Private Equity vultures out there that might see this as an opportunity.

I think they’ve got a good chance of making it through.

Stan

[Allan from Fallbrook]

Stansd: You make an excellent point regarding drawing down on available financing.

I used to do finance/accounting consulting for distressed businesses, and one of the first things I would check were the lines of credit.

This came to epitomize a company truly in trouble, because it speaks to the lack of liquidity. Generally speaking, it is cash flow (or lack thereof) that is gonna kill ya.

I think Mozilo saw the writing on the wall, and took the money and ran. I can’t imagine the timing of his selling all of that stock was mere coincidence.

[Allan from Fallbrook]

Stansd: You make an excellent point regarding drawing down on available financing.

I used to do finance/accounting consulting for distressed businesses, and one of the first things I would check were the lines of credit.

This came to epitomize a company truly in trouble, because it speaks to the lack of liquidity. Generally speaking, it is cash flow (or lack thereof) that is gonna kill ya.

I think Mozilo saw the writing on the wall, and took the money and ran. I can’t imagine the timing of his selling all of that stock was mere coincidence.

[Allan from Fallbrook]

Stansd: You make an excellent point regarding drawing down on available financing.

I used to do finance/accounting consulting for distressed businesses, and one of the first things I would check were the lines of credit.

This came to epitomize a company truly in trouble, because it speaks to the lack of liquidity. Generally speaking, it is cash flow (or lack thereof) that is gonna kill ya.

I think Mozilo saw the writing on the wall, and took the money and ran. I can’t imagine the timing of his selling all of that stock was mere coincidence.

[Alex_angel]

Let them burn down. They helped create this mess. Giving out million dollar loans to people that roll up in a beatup pickup smelling like horse crap that claim they have hundreds of thousands coming to them from their dying mother’s uncle’s cousin.

They built this house of cards and now it is falling on them.

[Alex_angel]

Let them burn down. They helped create this mess. Giving out million dollar loans to people that roll up in a beatup pickup smelling like horse crap that claim they have hundreds of thousands coming to them from their dying mother’s uncle’s cousin.

They built this house of cards and now it is falling on them.

[Alex_angel]

Let them burn down. They helped create this mess. Giving out million dollar loans to people that roll up in a beatup pickup smelling like horse crap that claim they have hundreds of thousands coming to them from their dying mother’s uncle’s cousin.

They built this house of cards and now it is falling on them.

[PerryChase]

Lets see. Countrywide just got $11.5 billion in financing from 40 banks.

Some questions I would ask are:
1) How much do they have in cash total including the $11.5 billion?
2) How much do they loan out each month?
3) How much are they able to sell on the secondary market?
4) At this rate, how long can they last as a going concern?
5) What did they do the shrink their business as the secondary market seizes up? They have 62,500 employees, up nearly 10% from last year.

It’s clear the secondary market is not accepting junk loans anymore. That means that CFC has to underwrite quality loans in order to sell them (and perhaps include buyback covenants in case of default). That will mean they’ll have much less business. Unless we hear of large lay-offs, I don’t think that Countrywide can make it. They need to shrink their cost structure first and foremost.

[PerryChase]

Lets see. Countrywide just got $11.5 billion in financing from 40 banks.

Some questions I would ask are:
1) How much do they have in cash total including the $11.5 billion?
2) How much do they loan out each month?
3) How much are they able to sell on the secondary market?
4) At this rate, how long can they last as a going concern?
5) What did they do the shrink their business as the secondary market seizes up? They have 62,500 employees, up nearly 10% from last year.

It’s clear the secondary market is not accepting junk loans anymore. That means that CFC has to underwrite quality loans in order to sell them (and perhaps include buyback covenants in case of default). That will mean they’ll have much less business. Unless we hear of large lay-offs, I don’t think that Countrywide can make it. They need to shrink their cost structure first and foremost.

[Author]

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