There's no way BofA ends up buying Countrywide as announced. No way. They'd be paying billions for something that will end up COSTING them tens of billions and legal nightmares for years and years to come.
Countrywide is every venereal disease known to man. And sure, it's closing time at the bar, but BofA is probably sobering up a bit now and Angelo ain't lookin' too good. Man, they should have just called their buddy HousingPANIC. We'd have taken those beer gogs off of 'em and got 'em home no damage done. Oh well, live and learn.
I'd love to see the look on Angelo's face when BofA tells him that instead of $4 billion and a huge package on the way out for The Orange One they're now offering $1, Angelo gets a new bottle of spray-on tan at most, and even then they're not quite sure they'll still go through with it.
Doubts Over Deal Hit Countrywide Shares
Countrywide Financial Corp. shares dropped nearly 10% Friday amid growing investor fears that Bank of America Corp. could walk away from its agreement to acquire the struggling home-mortgage lender.
January 19, 2008
BofA probably sobering up, realizing that Countrywide and Mozilo have every VD known to man, and there's NO WAY they'll end up buying 'em as announced
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This scenario was generally what I suspected. BofA announced they want to buy Countrywide, they sign an agreement that gives BofA decent flexibility to walk away, they set up a data room so BofA can "look under Countrywide's dress", they don't like what they see, and they attempt to renegotiate a lower price with Countrywide because they're the only ones at the table. If Countrywide balks, BofA either walks away or convinces the Fed to intervene and give BofA certain guarantees to manage their risk. I know people like to bash Ken Lewis, but he's not a complete idiot. He's already been burned by his investment banking division, and therefore I expect he's in the right frame of mind for looking over this potential acquisition.
Here is what I don't understand. By law, a bank cannot acquire another bank if the acquisition gives it more than 10% deposit market share (at the national level). BofA already has 10% market share before this acquisition. If the CW acquisition goes through, they will surely exceed the 10% limit.
The acquisition is illegal unless Congress changes the law.
Bank of America will go ahead with the deal because :-
-1.It will be gain great favour with the political leaders in Washington and the FED, which will always be of value.
-2. Buying countrywide will give it a valuable brand(it still valuable, no matter what you may wish) that will make it billions when the Housing market recovers
Good point - I don't remember seeing a line of other bidders
It's BofA or bust for Angelo
And negotiating 101 means that BofA could pay $1 and still buy 'em
But if they buy 'em, they own the cancer, and they'd lose tens of billions
They're going to walk away. You can take that to the bank.
V.D. F*ck that. Angie Orangello and Countyrwide have full-blown AIDS and that new super bug that is terrifying the gay male world, the New Bug is transmitted through unprotected anal sex (nice thought if you are eating your corn flakes while reading this).
They will die soon.
Would you screw that?
CFC is AIDS and BAC would be issuing a death sentence to itself then it would be known as DOA!
RE: Bank of America purchase of Countrywide:
When we think of the old Bank of Italy, visions of Amadeo Peter Giannini making handshake reconstruction loans from a sidewalk kiosk after the 1906 San Francisco earthquake come to mind. Later, the Bank of Italy became the Bank of America.
But Bank of America was gobbled up in a 1998 "merger" which some say was a hostile takeover:
"On October 1, 1998, NationsBank and the "old" Bank of America became a single unified entity in a merger that had been described as a "union of equals". About three weeks later, David Coulter, former C.E.O. of Bank of America was forced to resign."
"The prevailing impression is that Mr. Hugh McColl, the head of NationsBank forced Coulter into this resignation, thereby making it clear that he, McColl, was in control and that the two entities were not equal; that, in fact, NationsBank had effectively swallowed the old B of A to become one of the largest banks in the United States."
The same sharp players from NationsBank are involved in the Countrywide takeover.
By employing every dirty trick in the book, Bank of America will avoid being played for a sucker in the Countrywide deal.
V.L.
Anon 11:25, the Wall Street Journal believes that the 10% deposit criterion does not apply to thrifts, and Countrywide Bank is a thrift. The WSJ reported on this around the time the acquisition was announced. Even if they do exceed 10%, I think the government will find a way to exclude them.
Keith, when the private equity firm Cerberus bought Chrysler from Daimler, Daimler actually paid Cerberus to get rid of it! So it's not outside the realm of possibility that the government could give some money to BofA to acquire Countrywide, if BofA looks over the books and realizes they shouldn't pay a dime.
As long as BAC doesn't have to do an honest accounting of their own books everything will be fine. They can just put CFC in the assets column and cash out some more bonuses. Booyah!
BofA will be a buy the second it cancels the CFD deal, much like DYN did with Enron. Don't forget they have the $30B gain on their China Construction Bank investment. I simply see no value in the 'Countrywide' brand.
Lewis: Pay the $160m fee, eat the 2b, and GTFO.
OOOOOH.......Slutty.Nice
BofA is already sucking on $20 trillion in off balance sheet derivatives.
The only sane thing for regulators to do is "freeze" the debt and put it through bankruptcy reorganization.
There are no more games left to save this bankrupt system.
I think their sober designated driver, Warren Buffett, took away BofA's drink and said, "No, dude, you will regret it in the morning."
I bet the big sticking point is that CFC ***HAS*** to have multiple books. They propbably cooked more than one set.
I agree with the other poster. The G or the Fed is going to to give bOFa something under the table for their troubles.
I read somewhere that when Bof A buys CW it will avoid paying huge taxes and just write down the losses instead......does that sound right?
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Love to give her a shot in the ASS, but i don't like needles......Hmmmm
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I always thought that there was a slight chance bofa might take over CFC but I also thought that bofa was smart enough to know that CFC was too toxic to touch.
They really are just a bunch of monkeys at bofa and elsewhere. we are so f'd.
There is no way bofa will close the cfc deal was they have done the true due diligence. no way.
I read somewhere that when Bof A buys CW it will avoid paying huge taxes and just write down the losses instead......does that sound right?
They can only write off 35 cents on the dollar in losses. Would you spend a dollar to get back 35 cents?
The CEO of BofA should know better than to pay even $1 for something that has less value than a dog dropping. But this whole thing is not about the purchase...it is simply a ploy for those at the top to get out, get safe, and then let the hammer fall on top of all the "little people" (us).
The worst thing about all of this is that the very same FED/CEOs/Power Brokers/Govt/etc. who let of all this happen (or worse...engineered it to some TBD end), are the very same ones who are now going to impose their "solutions"...again to their own benefit.
The whole cast of scumbags need to be blasted into earth orbit (dressed in pirate outfits...suit and tie) to become permanent frozen statues to remind future generations of the pinnacle of greed and evil.
"Look class, there is Alan Greedspan and Darth Cheney floating by....boy they were sure old and ugly. These are bad men, the worst in history. That is why they were put into space, as the "Floating Museum of Evil". Miss Applebee..why is that one orange....?"
Even though CW and Tangelo gets alot of attention around here and on MSM rightly for the shenanigans they've played, the reality is they're small potatoes in the current default mess.
I was surprised to see CW had originated a relatively small percentage of at-risk loans overall, when the real big messes were created by the likes of CIT, etc.
I would think BoA has had inside access to CFC books ever since they did that $2 billion injection last fall. (Is this correct?). Thus they should know damn well what they are getting into. I think CFC could easily have $40 B in losses to write down, so I don't understand why
BoA is doing this, unless a lot of things are going on behind the scenes.
Also, since this doesn't close until 3Q - doesn't that mean CFC will still be reporting independently till then, and will have to report all sorts of losses/writedowns/cash flow problems until then? Will BoA be injecting cash to cover that along the way????
"injecting" - get it???
Would you spend a dollar to get back 35 cents?
Tens of thousands of house debtors do this, so why not banks?
Also remember, the FHLB has done something like $60 Billion in deals to take mortgages and mortgage-backed securities off the books of CFC. I've never seen good details on these deals, but Sen. Schumer was alarmed about the gov's exposure a couple of weeks ago and was starting to investigate.
It is possible that BoA can manipulate this angle to stick the gov and the sheeple with the major losses.
Anonymous Anonymous said...
Here is what I don't understand. By law, a bank cannot acquire another bank if the acquisition gives it more than 10% deposit market share (at the national level). BofA already has 10% market share before this acquisition. If the CW acquisition goes through, they will surely exceed the 10% limit.
The acquisition is illegal unless Congress changes the law.
January 19, 2008 11:25 AM
Silly boy. Laws don't apply to rich folks (or rich corporations).
All of the local Countrywide offices. . .
BofA is going to turn them into rental property managment branches when CFC's REO's hit the market.
Realtors new career can be showing homes to potential renters.
I'm pretty sure Tangelo forgoes the spray-on tan and opts for the dip tank method.
I'm sure the FED spoke to BOA about this.......they are trying to save the system.........the deal WILL go through......people have to "save face" ie: EGO. Anyhow the break fee is $100mil+.....should we be shorting BOA?
the breakup fee is Countrywide paying BAC 160M not the other way around.
"Anonymous said...
Would you spend a dollar to get back 35 cents?
Tens of thousands of house debtors do this, so why not banks?
January 19, 2008 7:54 PM"
Suzzaaaane!
hey baby, what are you going to do with that horse needle? oh no.......
Would you spend a dollar to get back 35 cents?
Tens of thousands of house debtors do this, so why not banks?
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ha ha. reminds me of a SNL skit where some marketing genius is describing a new business "change making". you give us 1 quarter, we give you 2 dimes and a nickel. How do we make money? one word: volume.
They can just put CFC in the assets column and cash out some more bonuses. Booyah!
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that is the truth! The execs involved with any merger/acquisition keep bonuses as part of the deal.
i meant "get" not "keep"
there's the debt on the books
there's the off-balance-sheet mark-to-fantasy-island-model debt
there's the off-off-balance sheet dubious special purpose entities debt
and then there's the off-off-off-balance sheet unlimited tort and criminal liability.
whaddya wanna beta some insiders have already made explosive photocopies and tapes, waiting for the day of CW's demise.
notice those wristbands were "radioactive green" color....
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