Countrywide: Still Alive, Apparently

Yesterday, rumors were rampant that Countrywide (CFC) was to declare bankruptcy sometime this week. The company denied the rumors, saying in an e-mail to major media outlets: "I feel happeeeeeee!"

Here is what I find particularly interesting about today's market.

First, I'm not sure why a potential Countrywide bankruptcy should send the market reeling like this. You know when you and your friends start talking about old movies or old bands? Inevitably the name of some actor or musician comes up and someone says, "I just saw him on TV the other day." And someone else says "He's still alive?" I kind of feel that way about Countrywide.

Second, didn't Countrywide claim they were going to post a profit in 4Q? It sounded doubtful to me when they said it, and it's not like things have gotten better in the mortgage market since. Maybe they do manage to pull it off, and if so, that stock will surge. But I sure as hell ain't buying.

Third, here are the bid/ask levels I'm hearing for Countrywide bonds... (by maturity, in dollar price)

2/08 -- 90/92 (floater)
5/08 -- 82/84
4/09 -- 63/65
6/10 -- 61/63
3/11 -- 60.5/62.5
6/12 -- 60.5/62.5

Sounds like the market thinks the recovery is around 60c on the dollar eh?

Comments

[Pj568:]

Sounds like bad news for that Florida government fund owning several hundred million in certificates of deposit.

2008 Jan 09 09:00 AM

[kurt walter:]

If CFC is going to be profitable in the 4th quarter as upper management has shouted, then why don't insiders buy the stock and bonds right now. I see them doing nothing. Until I see insider buying action, all the words are meaningless to me.

2008 Jan 09 07:27 PM