T-minus ? until Countrywide goes under.. . .

NEW -> Contingent Buyer Assistance Program
<p>hahaha...trooper.</p>

<p>waitingtill08, thanks.</p>

<p>He emphasized the dollar bill. If you really think about it. A dollar bill is just a piece of paper. Really not worth much. It's value lies in the US economy and so forth. Hence, the saying "In God We Trust". <---you essentially place your trust in God that this piece of paper is worth something. </p>

<p>Same goes with FDIC. It's a confident factor. </p>
 
My understanding, as lacking as it usually is, is that if 1% of depositers demand their money, the FDIC will not be able to oblige.<p>


On to the CFC news. It is amusing that the common shareholders find the BoA $ 2 bil purchase of preferred stock to be a positive. I wonder if the bidders realize that if CFC goes under, there will be $2 bil less that goes to the common stock holders, and CFC is now paying 7.25% on that $2 bil when they could have got money from the Fed discount window for 5.75%. Do they realize that the 7.25% will come out of earnings and the BoA stock is convertilble to common @ $18.00 per share, thus diluting present market cap? Oh well, there is one born every minute. I wonder if Mozillo is still selling his stock?
 
Maybe that would really put the panic on CW depositors?





Call me the tinfoil hat wearing lady, but I think many of these moves behind the scenes are to save CW, or at least ease them over to another bank w/o alarming the common folk.





Recall, <a href="http://en.wikipedia.org/wiki/Bernanke">Ben</a> is a student of the causes of the Great Depression.
 
reason - It depends what they are borrowing for. If they borrow from BofA for operations at 7.25% it works. If they borrow from BofA for the ability to use as collateral for the loans they originate it doesn't make sense unless they sell them quickly. With that said they did borrow with Fed money too. It is a long story that involves spreads and swaps. Honestly this doesn't solve their problems it just keeps them afloat until the credit market improves. That is if it ever does.
 
<p>I got a 17 month at 0% offer from Chase today. I thought about seeing how much I could pull. Just to do my part to subvert the dominant paradigm and stick it to The Man.</p>

<p>Suckers.</p>
 
I wonder how hard it is to calculate how much banks are really losing... $$ loaned out, multiply by % repos , minus % loss per repo home, add % interest earned on non-repo, subtract cost of money they loaned homes.
 
<p>reason - If they borrow from the discount window, they have to pay back within 30 days. On the new issue, they just pay the 7.25%. Other than that, I don't know why. I do know that if I was a depositor, I would be pissed. They are paying BoA 7.25 and paying their depositors 5.65%. Ouch!</p>

<p>Eva - tin foil hat? Nah! Just some common sense. GS, JPM, Lehman, and Merrill all borrow exactly 500 mil from the discount window yesterday? And what for? The problem is not that the member banks don't have the jake. The problem is they don't want to lend it because they don't like the collateral. It looks to me like neither the Fed nor the member banks know what the heck to do so they are reaching at straws.</p>
 
Interesting Comments from the head horse's mouth.. . . For a guy whose company in on the verge of bankruptcy, Mozilo has got a great tan. . .





<a href="http://www.cnbc.com/id/15840232?video=481743862&play=1">www.cnbc.com/id/15840232</a>



 
<p>awgee said: "I wonder if the bidders realize that if CFC goes under, there will be $2 bil less that goes to the common stock holders, and CFC is now paying 7.25% on that $2 bil when they could have got money from the Fed discount window for 5.75%. "</p>

<p>I was curious about this too. Apparantly, Mr.MysticTan says it couldn't be done. Countrywide Lending is not a bank, Countrywide Bank doesn't have the assets, it's against regulation, bla bla blah. I was too distracted by his melanin.</p>
 
I could be wrong, usually am, but it is my understanding that one does not have to be a bank to go to the Fed discount window. That is one of it's purposes, to supply liquidity to non-member entities. The catch is you have to pay it back within three, (now thirty), days. Call me paranoid, but it looks like a plan to get more assets out when CFC does go bankrupt. Maybe they want to make darn sure there is nothing left for the common stock holders. Was Mozillo wearing the same old time gangster suit that he seems to be so fond of? If there was ever a reason Buffett wouldn't have anything to do with CFC, it would be that suit. I don't care what she actually says, but I think Maria is a babe. Did she throw him softballs?
 
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