Will Countrywide Toxic Mortgage's Angelo Mozilo go to jail?

A) Yes
B) No
C) Not soon enough

Here's another couple of stinging exposes of The Orange One by Bloomberg and Krugman at the NY Times. Nice to see (again) the MSM catch up to HP. I especially liked the point that the damage caused by Mozilo to Americans (and foreign investors) is SIGNIFICANTLY worse than anything Ebbers or Lay did. SIGNIFICANTLY worse.

Note I'm short CFC via Oct puts.

Countrywide CEO sold big as stock dropped - Quick changes in Mozilo's trading plan raise red flags, experts say. The mortgage firm says the sales were in line with company policy.

As the mortgage industry swooned in late 2006 and 2007, Countrywide Financial Corp. Chief Executive Angelo Mozilo cashed in stock options valued at $138 million -- vastly expanding his wealth even as his shareholders watched their stock shrink in value.

"There is clearly no legal prohibition of altering your plan," said David Priebe, a Bay Area attorney who has helped set up more than 50 of such plans for executives. "But the more that you modify or add to your plan over a short period of time, the more risk that someone will call it into question. I would not say that you cannot do it. I would say there is a risk if you do do it."

And now here's Krugman highlights:

Enron’s Second Coming?

These days, of course, Mr. Mozilo doesn’t look like such a wonderful guy, after all. Instead, he’s starting to bring back memories of other people who used to be praised not just as great businessmen but as great human beings — people like Enron’s Ken Lay and WorldCom’s Bernie Ebbers.

So far, nobody has accused Mr. Mozilo of breaking the law. Still, what we’re learning from the housing mess is that the crisis of corporate governance, which made headlines in the early years of this decade, never went away.

Still, how can it be that so soon after Enron, WorldCom and other scandals rocked the business world, we’re once again hearing about executives cashing in just before their companies are revealed as less successful than advertised? The answer, of course, is that we never dealt properly with those scandals.

There is one big difference this time: the number of victims — misled borrowers, homeowners whose neighborhoods are being destroyed by foreclosures, investors who thought they were buying safe assets — is even larger.

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.

Here's could-go-bankrupt Countrywide Mortgage's Orange Mozilo on CNBC earlier today

Smooth.

Real smooth.

Here's the video.

Man, I'd check my watch after shaking hands with that cat.

Meanwhile, Maria sure is a softball tosser.

What questions would you ask Mozilo HP'ers? I'll see if he'll give us an interview. He he he.

Interesting to hear him say that CFC can't go to the Fed discount window because if I heard him right, THE BANK HAS NO ASSETS or access to Countrywide Home Loan assets.

Break that one down HP'ers. And yes, I'm short CFC. Nice to see the market call BS on this blatant pump and dump today.

Mozilo also called the Merrill analyst who reported that CFC might go bankrupt "irresponsible" who was yelling fire in a crowded theatre, and who (sob sob) negatively effected 61,000 Countrywide employees. Angelo, Angelo, Angelo, don't blame the messenger. Blame yourself for giving loans to liars while selling hundreds of millions of dollars of your sinking ship.

Angelo Mozilo - the new posterboy for greed, housing bubble style. Will he go the way of Ebbers and Lay? Time will tell.

It was all an illusion. And the lenders and homebuilders have to do whatever they can do to keep the illusion going. Otherwise they stop going.

Cramer had an interesting point on his freak-out on Friday. He recommended that companies like Bear Stearns, who are obviously imploding, should just remain quiet

"Just keep your mouth shut during this period - don't say a thing" he said.

Some companies, like IndyMac and Countrywide, are trying the opposite tact - talking aggressively and confidently on how they're well-positioned for the downfall, how they'll gain share as all their competition goes belly-up, how they have great liquidity and funding and business models, blah blah blah.

In the case of Countrywide, that talk is actually corrupt, as their orange CEO desperately dumps $118 Million in shares as fast as he could while the company at his direction was buying back shares to try to hold the price up for him (unsuccessfully).

So why the lies? Why the aggressive spin?

Because they're scared. They're scared because they know that this whole Ponzi Scheme is now dominoing. And if they show any sign of trouble or weakness publicly, they can get American Home Mortgaged out of business right quick.

Then you have Loan Center of California, which is hilariously and stupidly trying to sue anyone who talk bad about them, or expose the truth.

In the end, none of their spin and blather will matter. Funding lines will get yanked. Toxic loans will get recalled. Market demand for buying junk loans is at zero. Business models will have gone kaput. And hundreds of thousands of REIC will be on the streets, box and plant in hand, unable to make their own mortgage payments.

It's over folks. It's all over. Don't listen to REIC lies. Don't listen to realtors on commission. Don't listen to the Investment Banks. Don't listen to homebuilders who call bottom. And especially don't listen to the liars at the NAR.

It's over.

And all of us here saw it coming. Almost all of us.

Here's Countrywide Mortgage's Angelo Mozilo trying to defend why he sold $118 million in CFC stock before his company crashed

It's funny reading this on the same day that Qwest's former CEO Joe Nacchio was sentenced to six years in Federal prison and $52 million for insider trading and pumping up his numbers while he bailed out. Deja vu all over again? Hey, nobody saw it coming, right Angelo?

And for a CEO to be desperately selling as the company he runs is doing stock buybacks to prop up the price, man, that stinks to high heaven.

Ronald Redfield - Redfield, Blonsky & Co.: Were there any buybacks during the quarter? Do you find, Angelo, with all respect, you selling a material amount of shares into buybacks? You previously mentioned you own 10 million shares. How many shares do you currently own, not including options?

Angelo Mozilo: I don't know the answer to that question. I own -- including options, I think around -- I think it is around 11, 12 million, something like that. The sales of the stock had nothing to do with buybacks because that 10b5-1 agreement was made well over a year ago.

Ronald Redfield - Redfield, Blonsky & Co.: No, the legality is fine, but one can think that perhaps the price is being held up the buybacks creating a demand.

Angelo Mozilo: Yes, well, if you think like that it's -- I don't think like that. The buybacks were done because we thought it was in the best interest of shareholders. I have -- as somebody pointed out, I'm 68 years old, I own a lot of shares, and I have 10b5-1 that is in process right now. That is selling into this market when the buybacks are not holding it up.

So it is an independent issue that is not relevant to buybacks or not buybacks. It is a personal situation that I'm selling into a market no matter where the price of the stock is.

Angelo Mozilo: Okay, some final comments. One to the individual who asked about my sale of stock. The decision to buy back stock is a collective decision, really emanates from the financial operations of the Company as to what is the best return for the investment of the shareholders, invested capital for the shareholders. So it is totally unrelated to any of my issues relative to the sale of stock.

Secondly, as I said, I don't know the exact amount of shares that I have. But the shares that I have, actual stock I have, I have retained for 39 and a half years. Not sold a share of the initial stock that I got when Dave and I started this Company that I got, that I purchased.
The only thing that is being sold under the 10b5-1 are options with expiration dates.

Countrywide Mortgage's Angelo Mozilo, after desperately unloading his stock, says "nobody saw this coming". HousingPANIC calls bullsh*t.

Countrywide Mortgage's Angelo Mozilo had this quote yesterday:

"As I try to walk through what happened there and could a lot of this have been foreseen ... nobody saw this coming," Mozilo said

Angelo, Angelo, Angelo...

Have you never read a bubble blog? Have you missed the thousands and thousands of articles on the housing bubble and crash? Have you or any of your employees never taken an Econ 101 course? Have you never left your office and seen the sea of for sale signs? Have you never seen the countrywideforeclosures page?

Angelo - HP calls bullsh*t. You saw this coming. Your minions saw this coming. And you sold hundreds and hundreds of millions of dollars of your stock as fast as you could.

Why? Because you saw this coming.

And you might want to look outside in the parking lot. That's probably the Securities and Exchange Commission coming too...

When does it really get messy? When existing homedebtors realize they have to Mark to Market, the new prices set by the homebuilders

We all know in places like Phoenix, Las Vegas, San Diego, Miami, Tampa, Washington D.C., Boston, Sacramento and more, that new homebuilders have taken prices down big-time - either posted price or through the use of massive incentives.

Yet in those markets, stubborn existing homedebtors, less in tune with the market or Econ 101, and still under the illusion that 2005 prices are real, haven't adjusted their prices to the new market reality - or Marked to Market (yes, there's those three words again).

So what's happening in those markets and more? New homes are selling moderately well at the new prices as homebuilders take the haircut, slash the prices, and move the inventory, yet existing homes continue to not sell, and pile up like tumbleweed on a windy western day.

Eventually, some existing homedebtors will have to sell - or have the house sold for them via foreclosure. This starts the rush for the exits, the first ones out the door will be best off, then the real mess starts.

Note to existing homedebtors - 2005 prices are a joke. 2006 prices are a joke. 2007 prices are a joke. If you want to sell, just look at what true new home prices are at in your neighborhood (posted price less incentives), and price accordingly.

Here's a quick tidbit on this from CNBC's Diana Olick yesterday. Not only are prices going to come down, but when they do, watch for even more blood in the streets with the lenders.

I spoke to Nishu Sood, an analyst over at Deutsche Bank today, and he makes an interesting point. The big home builders have lowered their prices in the hot markets, like Las Vegas, down 25%, but the existing home owners have not dropped as far.

He expects to see existing home owners start to drop prices more dramatically in the second half of this year. If prices really start to hit the skids in these big markets--which are where all those speculator investors lived and breathed--then you can expect all those adjustable rate mortgages they used to really kick into high gear default.