So why hasn't Countrywide Toxic Mortgage gone bankrupt yet? Simple. They conned the monkeys at the FHLB into lending them $50 billion plus

Right before banks fail you usually see them go to the central bank or the government as their "lender of last resort". And then they fail anyway. Just look at the Northern Rock mess in the UK for the perfect example, a failed bank which will now be nationalized (and the taxpayers of course get screwed).

Countrywide Toxic Mortgage, a corrupt institution which will fail in the end, has been looting the Federal Home Loan Bank, using it as its "personal ATM", potentially robbing taxpayers of over $50,000,000,000 so far and counting.

Taxpayers!? How could that be? Well, because when the FHLB fails, who do you think will fund their bailout? You got it. Us.

So how is Angelo Mozilo and his gang of thieves doing this? Simple. They've conned the FHLB into giving them all those billions by putting up mortgages as collateral.

Yes, if it wasn't so funny it'd be sad. They're putting up their toxic mortgages as collateral, and the FHLB is taking them.

The FHLB is either too corrupt or too stupid to know that there's a housing crash underway in the US, and that the crap that Countrywide has on their books is nowhere near worth what Angelo says its worth.

It's one big house of cards HP'ers. And when it all caves in, and the media is all a-twitter, asking "how did this happen"? and "nobody saw this coming", well, once again, it was all just so obvious (for HP'ers).

What stops this madness? When someone in DC finally realizes that the FHLB is being had, tells them that taxpayers will NOT bail them out, and they finally cut Countrywide and Mozilo off.

And then things will get interesting.

Sen. Charles Schumer, a New York Democrat and member of the Senate Banking Committee, accused Countrywide on Monday of treating the FHLB system "like its personal ATM," having borrowed $51.1 billion as of Sept 30.

He said that, as Countrywide's mortgage portfolio deteriorates, the FHLB exposure "poses an unreasonable risk."

Yet Bigelow said "we are very familiar with FHLB collateral requirements, and we are in full compliance ... The FHLB has some experience in risk management, and they probably have some idea what they're doing in terms of their lending activities."

Why is the FDIC still insuring Countrywide and Indymac bank deposits?

Now that nobody will lend them money, these two toxic mortgage lenders are paying the highest rates on 1-year CD's in the US in a desperate attempt to draw in new deposits to shore up their imploding access-to-cash situation.

And you, the taxpayer, via the FDIC, insure the bank deposits at these two toxic lenders up to $100,000 per account.

My question is - why? Don't the folks at the FDIC know that there's already been a run on the bank at Countrywide? Didn't they see the Merrill report that Countrywide faces bankruptcy? Don't they understand that they called them "Liar's Loans" for a reason, and that Indymac can no longer sell their junk - that they're the bagholder?

Well, HP'ers, at least you can say you saw it coming. And when your tax dollars are going to bail out these two mismanaged toxic lenders, and their naive depositors, you can be even madder than the rest.

Note - I'm short CFC via Oct puts. And I don't have more than $100,000 with any bank.

Countrywide Mortgage's Orange Mozilo says he did no marketing to potential homebuyers. "They came to us". Sorry, Angelo. Incorrect. Liar.

Here's the Orange One, to Maria Bartiromo in a follow-up interview to the softball piece she did the other day:

Maria Softball:

Did you tailor your business accordingly as this (housing bubble) was happening?

Orange One's Response:

Remember, we didn't reach out to home buyers. They came to us.

Well, that's an interesting thing for the CEO of a publicly traded company to say. You'd have thought he'd have met his own marketing director one day, or approved his massive advertising budget. Guess that slipped his mind.

Folks, Countrywide spent $260,000,000 in 2006 on advertising and promotions (page 179 annual report, and for fun spent $35 million last month on internet ads alone!

"We didn't go to them! They came to us" - come on Angelo, how stupid do you think we are? Too bad Maria isn't a better reporter - she should have called you a bald-faced liar right then and there. Or were you flying her somewhere after the interview?

Boy, the Orange One is gonna have a real tough time in front of Congress answering questions without taking the fifth. Answering a reporter's softballs is one thing - answering under subpoena is another.

Yes, I'm short CFC. What a stinking pile of manure, led by a snake oil salesman who's gonna have some serious trouble staying out of jail. The mug shot will be a hoot though.

Sen. Schumer threatens Countrywide Mortgage and Orange Mozilo. HP just laughs and laughs and laughs some more

Senator Schumer, you, my friend, are a poodle.

Don't you get it? The cat is already out of the bag. The damage has been done. Your banker buddies got burned. And all your grandstanding and blowharding (is that a word?) isn't gonna help 'em, or America. We're toast.

Sure, go after Countrywide and Orange Mozilo - good luck with that. Once they file for Bankruptcy protection, is there really much you or they can do? (note - I'm short CFC)

Here's Schumer's money boys FYI. All the big banks and bagholders that got burned by Countrywide's reckless lending. Kinda makes you see things in a different light, eh HP'ers?

Schumer Tells Countrywide To End Lending Practices

WASHINGTON -(Dow Jones)- Countrywide Financial Corp. (CFC) should stop paying brokers higher commissions for steering borrowers to adjustable rate subprime home loans, Sen. Charles Schumer, D-N.Y., said Wednesday.

"Startling reports have shed light on how Countrywide has led the industry in the practice of steering borrowers into risky subprime loans," said Schumer, who is chairman of the Senate Housing Subcommittee. Schumer said that as of June 30, approximately one in four of the subprime loans issued by Countrywide was delinquent.