Deep Value

Countrywide: Potential Short Squeeze in the Offing

Isn't a short sqeeze a supply/demand funtion? Buy volume doesn't necessarily have to increase so long as sales volume falls. As the time of the merger approaches there will be more certainty and therefore less risk so the spread should tighten. I don't think there will be much CFC selling as the merger approaches.

What is Countrywide's Lending Operation Worth?

Who cares? We all know CFC is broken but BAC knows how to fix it. Jim's analysis is right on in my opinion... with pretty conservative estimates on operations. BAC may get off the hook with regard to many of CFC's liabilities as well.

CFC is trading at only a 10% spread on the deal value but I believe BAC in trading at about 50% of it's intrinsic value.