June 05, 2008

Doesn't BofA's Ken Lewis moving forward with Countrywide Toxic Mortgage seem kinda like Bush's Iraq clusterf*ck?


Rule #1: When you find yourself in a hole, quit digging

Rule #2: See rule #1

Bush blew hundreds of billions of taxpayer dollars and tens of thousands of lives even after it was clear he screwed the pooch in Iraq. And he just kept digging, and digging, and digging, refusing to admit his mistake.

In the same vein, Ken Lewis at BofA knows that he'll be seen as a fool if he abandons Countrywide now, after pumping in a few billion earlier, but of course he's an even greater fool if he actually closes on this cancer, instead of cutting his losses and walking away.

Either way, assuming this disaster goes through, Ken Lewis will be fired from BofA, and BofA shareholders will get slaughtered, and it'll be because of Angelo Mozilo and his corrupt gang at Countrywide. The lawsuits, the jail sentences and the billions and billions in losses will keep coming. And coming. And coming. And Ken Lewis of course will say "we never saw it coming".

Well, we did. And Mr. Lewis, take our advice, if you know what's best for you and your shareholders:

Run.

Fast.

And don't look back.

13 comments:

Anonymous said...

If I was him, I would demand the J.P. Morgan discount and threaten to walk away. I would demand the Fed pay the first 95% of the deal, and then purchase the remaining 5% of the ulta safe assets. Got moral hazzard?

Anonymous said...

But Keith, what about the value created by "synergy"

Anonymous said...

Synergy creates energy.

I hope that Bank of Amigo chokes hard on Countryfried. BofA is the sleaziest, worst customer service huge Home Depot/Walmart/McDonald's-style ripoff bank on the face of the planet.

Anonymous said...

Keith where are the jail terms ? What happened to the SEC investigation into Mozilo's trading of CW stock ? I guess their waiting for the right time to release the indictment ? I guess maybe BOA should try to buy someone else in the mortgage space that hasn't had problems in this current environment. Oh wait, there wouldn't be anyone in that position. I guess banks, wall street, mortgage insurance companies, bond insurers etc all have just CW to blame for these problems. Because afterall only CW was originating loans the past 5 years.

Anonymous said...

Ken Lewis is rich and he's playing Russian Roulette with the shareholders' head on the line.

Anonymous said...

Once again your ignorance is too apparent for the majority of poster here. BofA is getting essentially a mortgage servicing company. Most if not all of Countrywides garbage has been unloaded on investors. Yes there may be some problems short term, but in the end the millions of people still paying on time will be having their checks handled and processed by BofA. Even Wilbur Ross is buying mortgage servicing companies. Its just the latest example of how the rich get richer. Shareholder value was destroyed months ago, investors got duped months ago, BofA buys for pennies on the dollar and waits for the checks to roll in.

Anonymous said...

I recently purchased shares of BAC, not because of the proposed CFC merger, but in spite of it. BAC shares are not for the faint of heart! Must have 3-5 year time frame too. Lots of moving parts here:
1) BAC is considering placing CFC in a stand alone affiliate(Red Oak?), which is simply a way of stiffing the CFC bondholders if losses are greater than anticipated and minimizing lawsuit losses if unreasonably high. I'm not so sure this is legal but what do I know?
2) The gains on BACs Chinese and S. American equity holdings is more than enough to cushion losses @ CFC.
3) BAC is already at their size limit, 10% of US deposits, and this is a Fed approved way of surpassing said limit. I didn't realize CFC has such a large deposit base.

I personally hope Lewis walks away from this deal and picks up the pieces at the ensuing firesale. No one listens to me, hell my wife doesn't...not to mention I haven't received my farm-aid yet, after years of demands.

Anon 10:09 - you are right on the mark!

Anonymous said...

do you guys thinks they'll just dump all the garbage in Countrywide and then it'll go bankrupt and the bank won't save it?

JRB said...

Holy crap! I didn't think of it like that. You know that's exactely what's on Ken's to-do list - dump all of our sh!t into Countrywide, or whatever new name the things takes, and then let that baby go down like the Titanic.

It what imaginary, Alice in Wonderland type of world is this type of crap legal? The good ol' USofA, that's where.

By the way, the next time I go into get a loan, if anyone tries to bring up my high debt-to-income ratio I'm just going to tell them "Don't worry about all that nonsense, I moved all of my obligations off my books to the other company I own, Dumptrywide. So you see, my ratios are actually incredible. Now, I would like to apply for the loan that's 100 times my yearly income please."

Why can't you and I do the same?

Anonymous said...

BofA will put CFC in an escrow company (Red Oak), and allow it to collapse after they move the CFC assets onto the BofA books. The best of both worlds, for BofA.

Seeing the stock stock drop approx. a quarter in value for the past three months has to hurt though.

Hell of a gamble.

Anonymous said...

Keith, Get your facts straight. 10,000's of lives? Are you counting non-Americans would were murdered? No, you are not.

Anonymous said...

Anonymous said...
If I was him, I would demand the J.P. Morgan discount and threaten to walk away. I would demand the Fed pay the first 95% of the deal, and then purchase the remaining 5% of the ulta safe assets. Got moral hazzard?

June 05, 2008 10:09 AM
===========================
keyser soze said...


Anon 10:09 - you are right on the mark!
============================

So True!

Ken Lewis is going tp bleed this little soap opera to death, then at the last minute, when everything looks like its all wraped up nice and tidy, KL will utter those three little words : "Where's My Bailout!"

HeliBen has made it painfully clear that there is no such phrase as "moral hazard" is his book, and that "None of my Big Banker Buds will be left Behind."

This has Bear Sterns II written all over it!

Anonymous said...

they bought out my "quality" bank years ago at half price and installed the bought board into bonuses and incentives and stock options and me the shareholder has not made a dime in years and years......