[SeaHawkFan]

But what happens if it goes the other way... if the bondholder’s investment turns the other company around? When & how do they cover the short?

7.5% interest on the investment. Countrywide is going under. Too much overhead and too little business. The CEO has been exercising his stock options and selling them a few days later more than two times per week, so he's not very confident. Look for CFC to go bankrupt and for BoA to buy the assets they want at the BK auction.

[steveo]

Mozilo’s been exercising options and bailing as fast as he can. It’s been going on for months.