Anyone thinks a contrarian view of CFC?

[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.

[kev374]

Not sure if they will go out of business but they may have to declare Chap. 13 BK (viz Delta and other companies). The downturn is just getting started and already they are having serious problems, what is going to happen when all the ARMs reset in massive numbers and defaults/foreclosures go through the roof?

[kev374]

Not sure if they will go out of business but they may have to declare Chap. 13 BK (viz Delta and other companies). The downturn is just getting started and already they are having serious problems, what is going to happen when all the ARMs reset in massive numbers and defaults/foreclosures go through the roof?

[kev374]

Not sure if they will go out of business but they may have to declare Chap. 13 BK (viz Delta and other companies). The downturn is just getting started and already they are having serious problems, what is going to happen when all the ARMs reset in massive numbers and defaults/foreclosures go through the roof?

[Allan from Fallbrook]

Perry: Add another couple of questions.

How much is their existing capital base right now?

How much of a reserve will they need to provide in order to cover bad, sub- and non-performing loans?

In boating, there is a term called “the following sea”. It indicates a rogue wave from behind that you don’t see that swamps you. In CFC’s case, their balance sheet has to be in tatters right now. While cash flow/liquidity is the main issue immediately, they are also carrying a huge amount of drag related to bad paper.

I believe that this is what will kill them: Not what is in front, but the following sea.

[Allan from Fallbrook]

Perry: Add another couple of questions.

How much is their existing capital base right now?

How much of a reserve will they need to provide in order to cover bad, sub- and non-performing loans?

In boating, there is a term called “the following sea”. It indicates a rogue wave from behind that you don’t see that swamps you. In CFC’s case, their balance sheet has to be in tatters right now. While cash flow/liquidity is the main issue immediately, they are also carrying a huge amount of drag related to bad paper.

I believe that this is what will kill them: Not what is in front, but the following sea.

[Allan from Fallbrook]

Perry: Add another couple of questions.

How much is their existing capital base right now?

How much of a reserve will they need to provide in order to cover bad, sub- and non-performing loans?

In boating, there is a term called “the following sea”. It indicates a rogue wave from behind that you don’t see that swamps you. In CFC’s case, their balance sheet has to be in tatters right now. While cash flow/liquidity is the main issue immediately, they are also carrying a huge amount of drag related to bad paper.

I believe that this is what will kill them: Not what is in front, but the following sea.

[bsrsharma]

just got $11.5 billion in financing from 40 banks

 

One question though: Who in his right mind would loan 11B to a sinking ship? I want to open a (FDIC covered) account there (for high rates), but even I am hesitating!

And 62,500 employees losing jobs, man this is a great tragedy whichever way you see it. Bubble bursting is good ; but the human costs are going to be terrible.

[bsrsharma]

just got $11.5 billion in financing from 40 banks

 

One question though: Who in his right mind would loan 11B to a sinking ship? I want to open a (FDIC covered) account there (for high rates), but even I am hesitating!

And 62,500 employees losing jobs, man this is a great tragedy whichever way you see it. Bubble bursting is good ; but the human costs are going to be terrible.

[bsrsharma]

just got $11.5 billion in financing from 40 banks

 

One question though: Who in his right mind would loan 11B to a sinking ship? I want to open a (FDIC covered) account there (for high rates), but even I am hesitating!

And 62,500 employees losing jobs, man this is a great tragedy whichever way you see it. Bubble bursting is good ; but the human costs are going to be terrible.

[bsrsharma]

just got $11.5 billion in financing from 40 banks

 

One question though: Who in his right mind would loan 11B to a sinking ship? I want to open a (FDIC covered) account there (for high rates), but even I am hesitating!

And 62,500 employees losing jobs, man this is a great tragedy whichever way you see it. Bubble bursting is good ; but the human costs are going to be terrible.

[kev374]

Bubble bursting is good ; but the human costs are going to be terrible.

Yes it’s no good for the employees, but what about all those financially ignorant people who are losing their homes right now who got those exploding mortgages from Countrywide.

[kev374]

Bubble bursting is good ; but the human costs are going to be terrible.

Yes it’s no good for the employees, but what about all those financially ignorant people who are losing their homes right now who got those exploding mortgages from Countrywide.

[kev374]

Bubble bursting is good ; but the human costs are going to be terrible.

Yes it’s no good for the employees, but what about all those financially ignorant people who are losing their homes right now who got those exploding mortgages from Countrywide.

[kev374]

Bubble bursting is good ; but the human costs are going to be terrible.

Yes it’s no good for the employees, but what about all those financially ignorant people who are losing their homes right now who got those exploding mortgages from Countrywide.

[Author]

Posts