May 05, 2008

FLASH FLASH FLASH: BofA looking to cut Countrywide bid to $0 to $2, leading analyst recommends they just walk away from the orange pig

Tomorrow's news today, here on HousingPANIC. So when BofA walks away, Countrywide goes bankrupt, and Angelo Mozilo is indicted, there should be no surprises.

Remember when we said 1 penny was too much to pay, and that this deal would NEVER EVER go through? Countrywide is every STD in the book. BofA would have to be the stupidest company on earth to hook up with them. And the Countrywide lawsuits and liabilities for years to come will be staggering.

This gem hot off the wires just now:

BofA may lower Countrywide bid to $2/share or below

Bank of America Corp. is highly likely to negotiate a sharply lower price for Countrywide Financial Corp, and should just walk away from the deal altogether, an analyst said Monday.

Bank of America could face $20 billion to $30 billion in write-downs of Countrywide's mortgage loans after it closes its acquisition of the troubled mortgage lender, FBR Capital Markets analyst Paul J. Miller Jr. told clients in a research note.

"BAC should completely walk away from the CFC deal, as CFC's loan portfolio will prove a drag on earnings and could force BAC to raise additional capital," Miller wrote.

Even if Bank of America sticks with the deal, it's likely that it will cut its offer "down to the $0 to $2 level," and force Countrywide's bondholders to absorb the remainder of any write-downs, the analyst said.

19 comments:

Mark said...

.


Doesn't this start the "cascade" or dominos falling...

Countrywide goes bankrupt...

The default on their CDSs, CDOs and other obligations...

That market crashes (totally)...

Driving another credit crisis...

Anonymous said...

1. wasn't there some serious behind-the-scenes pressure from the fed or somebody to get this deal done???? same thing as Northern Rock - too big to fail or too likely to touch off something else...

2. this could very well be the start of a game of chicken with Uncle Ben -
same thing as Bare Sterns - Ben picks up the losses or the deal does not get done - ball is in your court, Ben... is Ben willing to risk a major systemic meltdown in order to impose some financial discipline on lenders, or will he fold and start handing out cash... I think we know the answer to that one...

Anonymous said...

Where have all of the regular commentators gone? You know, the ones who used to make intelligent observations and provide provocative links?

Have they all been moderated out of existence or have they decided to post anonymously? From the looks of things, they have all drifted away. It's a real shame.

This tyrannical blog has become a complete waste of time.

Anonymous said...

Shareholders will get zero, and the near $100 BILLION of bondholders will get 70 cents on the dollar in BK, as BofA lets it go through re-org to crunch everyone down to allow for risk in the portfolio of mortgages. Keith you should consider putting a poll up to see how hard the bondholders get crunched...it is coming...

yu been skooled said...

FLASH:
Yu Been Skooled stunned to see HP staying inside their circle of competence, housing. Wonders if it will hold.

In other news:
Pigs fly, Some HPers plan to rebel and start opining on economics, black helicopters, The Mothership, and Zenu.

Anonymous said...

FLASH FLASH FLASH

Bailout package passes house committee and is well on the way to final passage. Anyone with an ARM can no refinance into an FHA loan. Buh-bye foreclosures. And also buh-by e any hope of bitter renters every affording a home. Hope you all enjoy the 1 bed 1 bath.

Mark in San Diego said...

"Where have regular posters gone". . .Anon - probably some of us have drifted away a bit because our job here is nearly done. . .the panic has taken place, the economy is in shambles (so much so that the Treasury has to send $600 out to prop it up), housing prices are in free-fall in bubble areas, and the money is flowing from the USA to China, Middle East oil countries, India, Europe, etc. ANYPLACE that can offer a better return - Mexico?? Yes even Mexico. . .so now we are just "dancing on the grave" of the failed economic policy. . . hoping that after the collapse, someone like Ron Paul will emerge. . .waiting, waiting, waiting. . .

DreadlocCowgirl said...

Bank of America cancelled my line of credit and wouldn't give me a credit card because of my low FICO scores. However, thay wanted to save Countrywide? Screw 'em, I hope they both go under! I got a credit card from my credit untion instead.

Anonymous said...

i walked past the Countrywide office in lovely Monterey, CA yesterday....ground level offices closed up only leaving 2nd floor space. desperation.

Macaca

gutless and lazy strikes again said...

I hope BAC goes BK. BAC or should I say Bank of India .. it outsourced I.T. to India.... let it fail. It's also Banco Mexico for doing banking with millions of illegals. Illegals now creating bad debt. Let BAC fail, it's a PIG.

W.C. Varones said...

Don't forget the $160 million reverse break-up fee.

B of A gets paid to walk away

Mammoth said...

Anon 3:30 PM asks, “Where have all of the regular commentators gone?”
-------------------------------
Can’t speak for the others but I just returned from a trip to Russia and did not post while I was over there. My brain is still a bit scrambled from jet lag as well as some intense experiences within a short stretch of time; however despite this, I did have the foresight to exchange $1,000 into Rubles.

I will be returning to Russia in July, and expect the Dollar to continue its slide in value against the Ruble, so the Rubles which I just bought will hold their value.

And Mark, I disagree that “our work here is nearly done.” Case in point - in a recent conversation with a neighbor, he was telling us about buying Gold, Cheney’s drooling over a war with iran, and about the need for people to pay off their debts and become more self-sufficient.

After he left, I turned to my companion and asked, “now that you’re hearing the same thing from other people that I have been talking about, are you beginning to see the light yet? Her response was, “well, this guy has always seemed like he is on the fringe.”

So, as you can see we still have work to do.
-Mammoth

Zeenunian said...

(yu been scooled said) -The Mothership, and Zenu.--

You misspelled it. It should be ZEENU.. Hail oh Mothership!

Rordogma said...

Re: Where have all of the regular commentators gone? This tyrannical blog has become a complete waste of time.


All the intelligent talk is happening at Ticker Forum, Karl Denninger's site.

http://www.tickerforum.org/

HousingPanic has devolved into a sensational gossip site for intellectuals, TMZ for smart people. It's fun to peruse, but you'll gain nothing from it. It's financial porn.

Enjoy it! then head over to Ticker Forum.

Russ DoGG said...

Hello FBI!
Frog MArch the Tan One please.

This game of playing chicken with systemic collapse (in order to Jones for a bailout) is looking more probable and I hope the Fed reserve wises up.

Anonymous said...

re Anon4:39 Bailout flash-

So what if you can get out of an ARM and into an FHA fixed? How many of hthses people can qualify off their actual income. Don't think FHA is gonna allow a stated income program on this.

Anonymous said...

$0?

Sounds pretty damn steep to me. Once you factor in the liabilites that pig is probably 'worth' a fairly large negative number.

Anonymous said...

so what are we saying here? that cfc is worth about zero? does this mean that all the hedge funds , mutual funds and etc, who own massive amounts of these shares, now own nothing? what does this mean? also mozillo still owns about 450,000 shares too.........oh boy....

Jack Walsh said...

if BoA walks from the deal then the Fed will have no choice but to pull another BearStearns style bailout, this time for CW

so everyone get your wallets ready this could get expensive

no, not you Angelo Mozilo, you can keep your 120 million