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Nov 21, 2007 4:25 pm

Wow… Did you all see how low Countrywide is selling today?!? That is just crazy!!  I have a few clients that own Countrywide bonds and these are selling lower than GMAC’s.  WTF!

  Miss J
Nov 21, 2007 5:23 pm

Yea…Its an indicator of housing market, which is usually an indicator of things to come.

Nov 21, 2007 5:50 pm

That underscores the notion of diversification.  Do your clients have more than 10% of their investment assets exposed to any one company, such as Countrywide?  If so, you’re witnessing the potential damage such concentrations can do to client portfolios.

  Countrywide management has assured the public that they're not in any danger of bankrupcy.  The question is two-fold...(1) Do they have a full understanding of the situation they're in and (2) Are they being honest with us or just buying time to try and save a floundering ship?  If they're a survivor (and not all mortgage companies will be), we'll probably look back at this as a real buying opportunity.  The problem with buying now, is potentially seeing the stock even more depressed in a week/month/whatever.  It takes both brains and...I'll use the term "guts" here, to make money in markets such as what we're seeing.   I'm curious what our resident "Bond Guy" thinks about CFC...
Nov 21, 2007 7:13 pm

I’m not a buyer, at least not yet.

  Indy, you've summed it up, it's just too early.   To be honest, I'm not really following CFC, or for that matter most of the mortgage companies. This stuff gives me a headache, and that'll ruin my turkey day. And I surely don't want to do that!   I've got my hands full with the fall out in Munis.   Once the smoke starts to clear I'll take a look around the junk yard to see if there's anything worth salvaging.   All that said, these markets will create opportunities. Keep your eyes, ears, and minds open.        
Nov 21, 2007 8:31 pm

I think if you’re going to consider exposure to Countrywide at this time, the best risk/reward is in owning the debt, not equity.

And of course that is merely a comment, not a reccomendation or a research report.  Do your own due diligence and govern yourself accordingly.

Nov 21, 2007 8:59 pm

Ha Ha.. Joe I like how you skirted that line... I agree. I have some clients that own CFC because they work there and that is the stock their employer gave them. I am asking them to reduce their positions to no more than 5%. Normal Jones holdings... I do have more than one person holding debt from Countrywide. Some in the form of CD's and the rest bonds. Jones today announced that owning Countrywide Bonds is considered Aggressive income... <?: prefix = o ns = "urn:schemas-microsoft-com:office:office" />


Either way... I will continue to watch it. I was just shocked by the fall. That is a cheap stock right now.

Nov 22, 2007 2:51 am

I am so glad I have been shorting CFC, MTG, PMI, FRE, and LEN for months