March 09, 2008

FLASH: Countrywide Toxic Mortgage (finally) under investigation by FBI, and Angelo Mozilo under SEC investigation too. It's just a matter of time now


It's only a matter of time now HP'ers. Angelo Mozilo will spend the rest of his days, after his conviction and surrender, in jail. The orange man will be wearing an orange jumpsuit for the rest of his life, and he will be joined by more than a few of his fellow Countrywide employees in my personal opinion.

A few more comments on this expected development

1) There is NO way that Countrywide gets acquired by Bank of America. No way. Ain't gonna happen. Not even for a penny. BofA would have to be the stupidest organization on earth. The Countrywide lawsuits and criminal investigations will go on for years to come, and the penalties, judgements and fines will be in the tens of billions, if not more. If BofA acquired CFC and their liabilities, it could wipe out BofA's balance sheet in a minute.

2) Angelo Mozilo and Countrywide are rightly taking the blame for the mortgage meltdown, subprime disaster and housing crash. Their employees, led by their insider-trading, self-enriching executives, knowingly enabled mortgage fraud (they called them "liar's loans" folks), and enriched themselves at the expense of their shareholders by dumping shares even as they were borrowing money to buy them back on the open market. Shameful.

3) As pointed out here for years, Countrywide was putting out obviously falsified financial statements in violation of Sarbanes-Oxley in order to juice short term results and their stock price while Mozilo and the insiders were dumping to the tune of hundreds of millions of dollars. Not only will Countrywide be investigated and found guilty, but their auditors will be as well.

4) Countrywide has conned the corrupt and incompetent fools at the Federal Home Loan Bank out of at least $51 billion and likely more than $100 billion, which in the end will be bailed out by the US taxpayers, by using laughably over-inflated and wildly mis-marked mortgage-based assets for loans. NO TAXPAYER BAILOUT FOR THE FHLB - LET THESE BOZOS FAIL TOO!!!

5) Angelo Mozilo will go to jail, unless he flees from justice or kills himself. He is the Ken Lay and Bernie Ebbers of this latest financial mania. He ruined lives, he helped destroy the American economy, and he may be the most destructive business person in the history of the United States. He should be arrested immediately, and he should be shown no mercy.

48 comments:

Anonymous said...

judgment not judgement

Anonymous said...

Housing Panic/housing blogs=new muckrakers

Anonymous said...

YAHOOOOOOOOO!!!! Go get him boys, its better late than never!

satan said...

I think it is time to talk openly and repeatedly about the real problem with banks and other financial institutions- namely solvency, as opposed to liquidity.

Russ DoGG said...

who are these auditors you mention?

just thought this might be another short opportunity?

-Frog March the Tan One
Russ DoGG

Anonymous said...

Wall Street banks are facing a "systemic margin call" that may deplete banks of $325 billion in capital because of deteriorating subprime U.S. mortgages, Reuters quoted a JPMorgan Chase report as saying.

Anonymous said...

That greasy dago should fit in fine behind bars with his fellow goombahs

Anonymous said...

You know none of that is going to happen, right?

Anonymous said...

"The Countrywide lawsuits and criminal investigations will go on for years to come, and the penalties, judgements and fines will be in the tens of billions, if not more. If BofA acquired CFC and their liabilities, it could wipe out BofA's balance sheet in a minute. "

God, you're so blissfully unaware of the details of the purchase, and M&A 101, it's laughable. Leave the predictions to the pros, and stick to your wild fantasies about frog marches.

tan man lives said...

case serin is looking for a cell mate.He uses ky jelly too.

DOPES said...

MY ATTORNEY SAID I COULD BUY HOUSES AGAIN TWO YEARS AFTER MY BANKRUPTCY IS DISCHARGED...

I WAS COUNTING ON ANGELO AND COUNTRYWIDE TO GIVE ME MORE LOANS THEN...

THIS ISN'T GOOD NEWS FOR ME KEEFER...

DOPES!!!

Anonymous said...

European banks face $68bn more write-offs 9-Mar-08 12:25 pm European banks face $68bn more write-offs

By Louise Armitstead
Last Updated: 12:43am GMT 09/03/2008

Europe's biggest banks could be forced to more than double their write-downs and take a further $68bn (£34bn) hit as the credit crisis enters a "new phase", according to City analysts.

In recent days, forced selling in the credit markets has suggested that the banks are substantially overvaluing their positions on their books. So far the top 11 European banks have written-off $58bn of losses due to the collapse of the credit markets but analysts at Merrill Lynch are now arguing that, using the market prices in recent week, the write-downs should be far bigger.

For example, last week UBS sold a tranche of so-called AAA Alt-A loans at the heavily discounted price of 70 cents in the dollar. The Merrill's note that last week circulated in the City said: "If 70 [cents in the dollar] is the right price for AAA-rated Alt-A assets, everything else has to be repriced too. Sub-prime can't then be worth the 75c in the dollar at which European banks carry it. Assuming European banks see this as a wake-up call to revalue their positions, the top 11 could need a further $68bn of write-downs."

The adjustment would have a big impact on the banks balance sheets. The Merrills analyst wrote: "This would be equivalent to an average 14 per cent hit to book value for the top 11 banks."

The banks most likely to be effected include UBS, Barclays, Royal Bank of Scotland, Fortis and HBOS.

Banking sources this weekend confirmed that investors and regulators are now exerting pressure on the banks to make this adjustment.

One source said: "There's a definite shift in belief that the uncertainty in the markets over the value of these assets can't go on. A new phase in the crisis is starting in which facing the reality that these assets are not going to recover in price - but there's resistance because it could be even more painful."

Anonymous said...

Why is Mozilo going to prison? Because of toxic mortgages? Did he force these homeowners to take out loans? What about personal responsibility on the home buyer?

eric in vegas said...

If the BofA deal goes through then there is no doubt the government is behind it.

Anonymous said...

Hate to say it Keith, but I really think Angelo has covered his A$$ pretty good on this one.

He will just use all that "But I had a pre-arranged trading schedule, and "I built this company from the ground up" stories and get away with it!!

I wish it were otherwise...other Mgmt heads might take the fall, but Ole' Orangello is too slick to get caught is what I think...sad but true.

Anonymous said...

Well what's most important to determine if he'll do time is if he's bribed... I mean 'donated' to the campains of the right politicians... I mean crooks.

Стивен said...

Another shorting opportunity?!

My CFC puts passed into the linear region long ago -- even if CFC goes BK the percentage gain would be small now. OZFMQ.X for $2.50 is only $65/contract. Hmmm...

Anonymous said...

Keith said...

It's only a matter of time now HP'ers. Angelo Mozilo will spend the rest of his days, after his conviction and surrender, in jail.

You mean like Ken Lay? You mean like Milken? You mean like all of the other thieves and crooks of Enron and Worldcom ad nauseum?

He will not spend a single day in jail.

As you like to say, we are no longer a nation of laws.

Anonymous said...

You want to know what is going to happen to this POS? Nothing.

SeattleMoose said...

The poster boy for bad karma...

Keyser Soze said...

I have a suspicion that BofA is simply trying to weasel their way into acquiring that juicy servicing bidness yet still have the right to throw back the portfolio foreclosures to the FDIC(RTC) once CFC goes belly up.

Anonymous said...

Are there any stable banks left where we can feel safe placing our money?

Anonymous said...

Mozilo is the 'posterboy' of the main-stream mafia that has systematically stolen this country's financial future.

Jail is too good for these bastards.

We need to use the recently 'legalized' waterboarding technique to 'persuade' these chronic thieves into telling the truth about how the system is rigged, where the pilfered money's been sent, and 'spill the beans' on the rest of their cronies.

Then, after we've weeded-out and rounded up the vast majority of them, ship them to a special Texas death row facility for prompt extermination.

Our Founding Fathers would probably consider this kind of treatment too compassionate...

WINGS said...

Angelo Mozillo should be handed over to Andrew Hac to be roasted over hot coals till he's sizzling and cooked.

This is one Americano that is Snapper Turtle ready for the BBQ!

Anonymous said...

Countrywide = LOANRON

repeat it

Countrywide = LOANRON
Countrywide = LOANRON
Countrywide = LOANRON
Countrywide = LOANRON

Anonymous said...

I agree with you Keith that Mozilo did all those thing that you say ,but what was that dog and pony show at the hearings with Congress the other day.

Ed said...

Oh man Keith, you are playing right into the hands of the MSM/bailout crowd.

It wasn't Juan's fault he signed up for a $5000 a month loan. It was the big bad bank's fault for lending it to him. So the only fair thing to do is give Juan $4000 a month of taxpayer money to help out.

Don't bitch when the giant bailout comes later this year. You will have been partially responsible.

Anonymous said...

with all the CFC layoffs (soon to be BK) and prison overcrowding, why not just turn the Countrywide headquarters into a prison. would certainly be many more then orangeman serving time there.

OriginalFrank said...

"Are there any stable banks left where we can feel safe placing our money?"

Piggy bank, but bury it deeply.

Anonymous said...

He will either be pardoned by Bush or "die" in prison. Either way, he'll probably be golfing with Kenneth Lay on some secluded island in 2009.

Ohio Loan Officer said...

Everyone is making a big deal over Countrywide. They are just the Poster Child in all this. The big banks are just as much to blame if not more. Only the bigbanks are able to hide it better. Countrywide only did one thing--mortgages. The big banks, with all of their deposits, car loans, CDs, equities, they can shift #s around to make it look like they are sound when in fact there is a lot of rot there.

guy n. cognito said...

i think their auditor is KPMG.

another Big 6 about to bite the big one :-)

million said...

it gets better...

http://www.inman.com/news/2004/01/2/countrywide-replaces-independent-auditor

CountryFried bumped Grant Thornton for KPMG back in late 2003. blessing in disguise for Grant Thornton. now KPMG is named as defendants in every lawsuit hitting CountryFried :-)

Paul E. Math said...

Waterboard Mozillo.

Anonymous said...

Anonymous said...

He will either be pardoned by Bush or "die" in prison. Either way, he'll probably be golfing with Kenneth Lay on some secluded island in 2009.

Not much golfing I am afraid. Kenny Lay died. (with all of his money safely stashed away)

Bye Bye Dickhead said...

I hope Angie kills himself.

Keyser Soze said...

Who will play Angie in the upcoming cable movie?
Giovanni Ribisi.
Pacino
Clemenza from 'Godfather'?

Anonymous said...

Mozilo is evil ,I'm telling you he is evil . It is not relevant that Mozilo built his Company from scratch .Once you become a public traded Company you have even a higher standard of operation to adhere to .
Countrywide was a big force in the marketplace . If orange man was pumping up the stock by fee income by taking in really bad loans and strong arming customers on highly profitable loans ,in order to dump stock at high prices (which all the evidence points to to fact that he was doing this ) ,than what is the excuse ? Mozilo should of known the conditions of the market .
What do you think about a CEO that helped promote the worst lending in 75 years ,especially in the final years when he decided to dump and run .It's amazing how much damage a party can cause in just a couple of years of bad lending . Mozilo also took advantage of the fact that there is a delay period usually for discovering a bad loan. I'm sure Mozilo didn't think he would get caught holding the bag on the junk loans he had and that the secondary market would not want to buy them and this is when Mozilo's problems started .It must really hurt Mozilo that he had to start re-writing some of those toxic loans that he really wanted to pawn off .Must be hard waiting for the government to take over his junk loans and wait for the powers to raise the loan limits . Now Mozilo's advice is that the GSE's need to become loose on the underwriting ,you know ,to advance the American Dream.
I want the guy to go to jail. What he did is no different than a Company throwing a toxic product on the market causing many people to die ,much like the toxic dog food .

Veronica Lodge said...

RE: 5) Angelo Mozilo will go to jail, unless he flees from justice or kills himself.

Justice?

There may be justice for Angelo Mozilo in the next world.

But here on earth, we have only the law and the law rarely convicts persons of wealth and power.

During the last two years, Angelo was selling his personal stock in Countrywide while the company was buying it back with borrowed money. This appears to be the only thing he did that could result in a conviction. Of course, he will claim that this stock manipulation was carried out by underlings without his knowledge.

The rest of his bullsh!t, such as "I've done nothing wrong", "The sub-prime victims are to blame", "I had a stock liquidation plan in place long before the real estate bubble burst", "Nobody ever predicted a real estate crash" etc. will probably go unchallenged.

Personally, I was moved by Angelo's opening statement, particularly the part about his love for our country.

V.L.

Anonymous said...

You mean like Ken Lay? You mean like Milken? You mean like all of the other thieves and crooks of Enron and Worldcom ad nauseum?


Lay only avoided prison because he dropped dead. The rest of his Enron cronies are in prison right now. Milken also spent time in prison. Are you trying to act stupid or were you just joking?

Anonymous said...

Keith,
Your Replubican friends were defending CEO's salary by mentioning they made less than 2006.

Anonymous said...

Mozilo committed the most horrible crime imaginable in the view of liberals. He didn't kill. He didn't rape. He didn't cause anyone boidly harm. No, much worse than that in the diseased mind of the liberal.

He made money.

And now he will be prosecuted and locked up.

Welcome to Nancy Pelosi's new America.

elo...face the music said...

Osama Bin Ladin was seen in Dubai, UAE last week golfing.

Serioulsy.

He had nothing to do with 9/11. It was all one big oil scam which has lead to this today. Just connect the dots my friends. The end is near.

Nobody can stop bush and his oil budies from taking over America and the world by massive acts of deceptions, lies and fake terror attacks. NOBODY.

Anonymous said...

"He made money and now he is going to be locked up"
Yes, and drug dealers are respected because they have money! It doesn't matter how they earned it! How about those doctors who overcharge health care for "visits" during a persons stay at the hospital? They earned it surely.
Or Lawyers who overcharge divorcing couples and drag out proceedings because it will bring in more money.
Or Realtors who get appraisers to overprice housing in an area to raise their final commission.
Politicians who want money or direct support first before approving zoning laws for Casinos and other projects.
Rich people never go to jail for crimes nor are they ever sunk back down to the bottom. Their own "class" won't let them fail totally. Especially people like Mozilo.
Yes, the old double standard, Mozilo is innocent, he only made money. SURE!

Anonymous said...

You would have to understand the product of a loan to see what Mozilo did to raise the value of the stock he dumped .

The lending by Countrywide got decidely worse from the moment orange man started his plan to dump his stock . The news gets around about how loose a Company is and the brokers and real estate agents swarmn to whoever is making their life easy with easy lending .Than the fraud deals get funneled to where the lack of over-sight is taking place.
A force as big as Countrywide would be noticed ,especially if they were getting loose as the market conditions demanded a tightening and there was evidence of a lot of fraud occuring .
The fact that Mozilo was passing these junk loans on to buyers in the secondary market is another crime. Countrywide was not sending out 1099's to brokers that filtered loans to them either (which would cause brokers to use Countrywide because of lack of reporting of their income. )

The additional move that Mozilo made regarding the Company borroing money to buy back the shares he dumped at a market high is another part of intent to keep the shares high . All this was taking place while a Lending environment should of been contracting ,or tightening and fraud prevented . That is how big of a force the biggest mortgage company in America can have on a market .
Not only was Mozilo willing to pass on really bad junk to the secondary market ,he also was willing to push the worst loans on the public because they were the ones that paid the highest fee income ,
Believe me that Mozilo would of know that the real estate market was beginning to peak on affordable housing , and he would be very aware of the decrease in borrowers who could qualify ,even on the creative loans .
Mozilo has been around long enough also to know that it was a very unusual appreciation trend in which houses were going up beyond sustainable .This guy has been through many cycles of lending ,so he just can't say he didn't know .
The point is that if you fail to do your job because you know the market will contract soon , and you do everything possible to pump up your stock that you dump ,and it damages a market or causes prices to rise even more artifically ,than you did it for personal gain .
Now orange mans company is about to go BK and the government will need to take a loss on the billions of dollars the Feds loans Mozilo on all those junk loans he got stuck holding the bag on .

So we the taxpayers get Mozilo junk loans that will default .You don't know how powerful a loose source of funds can be in a market .
I believe that Mozilo thought he could pull this all off and be out of there by the time the market tanked but the issue of people not wanting to buy his loans came on him like a bat out of hell .

If you notice the other CEOs at the hearings with Congress are eating it by the value of their stock going down to low value ,and its only Mozilo that made out with all these stock shares at a high value. The other CEO's were not in a hurry to unload ,and its really weird (tax wise ) that one would unload so much stock in such a short period of time (if you had a belief in the value of your Company and the continuing value of your Company .

AT one point Mozilo made some noise that he was retiring because he needed to send the grandkids to college and things like that . Isn't that a weird statement ?

Anonymous said...

Mozilo didn't just make money ,it was how he did it. It's pulling a fast one because you want to dump your stock because the value is going to go down based on the insider knowledge you have . It was also a attempt influence a market by making bad loans to pass them on as well as keep a stock price high so you could 'pump and dump ".
Martha Steward got jail time for simply selling some stock based on a insider tipto avoid losing some money . Can you imagine a CEO changing his business practice ,causing untold damage ,so he could pump and dump and get the advantage of a stock at a high . Mozilo Company borrowed money to buy the stocks he wanted to dump at a high . WOW .Doesn't that look like a guy in a hurry to get out who didn't even have a buyer other than Countrywide for all that dumping . I bet the employees with all their stock positions and pink slips are real pleased with how things went .

This is not a case of someone making money but a case of someone trying to rig it so he would win and everyone else would lose . I win ,you lose . Very greedy man who stabbed the Country and employees and borrowers that gave him the opportunity to make a fortune for years .

A Company is made up of the employees and they are serving the cutomers and you can't burn those parties and just take the money and run after you just robbed a bunch of investors . Think about all the people that would lose money because of Mr Mozilos ambitions on his way out .

Ed said...

"elo...face the music said...
Osama Bin Ladin was seen in Dubai, UAE last week golfing.

Serioulsy. "


WHOA! Realy dude. Like whoa man. I also read on the internets that Bush plays golf. So like dude, like whoa man, like if Bush plays golf and OBL plays golf that means that like Bush and OBL are in on it together to like dude, take over the world.

So make sure you vote for a democrat who doesn't play golf and all will be well.

Anonymous said...

Mike Gallagher (a talk radio host) has spent at least an hour on his show (03/11/08) saying the CEOs of Citi, Countrywide, etc, are prime examples of the American Dream and now people want to bring them down simply because they made some money. He is saying the congressmen, like Waxman, who simply asked questions of these CEOs are anti American.
I wonder if Mike got a lot of money from the banksters (Mike used to be in Congress) or if he helped trash Glass-Steagel and now feels defensive.