Posted on 08/25/2007 5:59:22 AM PDT by Hydroshock
Edited on 08/25/2007 11:43:24 AM PDT by Admin Moderator. [history]
NEW YORK (Reuters) - Countrywide Financial Corp Chief Executive Angelo Mozilo said on Thursday the U.S. housing downturn is likely to lead the country into recession, but that the largest U.S. mortgage lender will survive.
In an interview, Mozilo also said that to promote liquidity, the U.S. Federal Reserve should cut the rate it charges banks to borrow.
Countrywide faced a credit shortage this month as mortgage defaults rose and capital markets tightened. On August 16, it announced an unexpected drawdown of an entire $11.5 billion credit line because it had trouble selling short-term debt.
But on Wednesday, Bank of America Corp said it would invest $2 billion in Countrywide, buying preferred securities convertible into common stock.
This eased fears about Countrywide's fate, which at least two analysts this month had said could include bankruptcy.
Mozilo called the investment a "vote of confidence" and a "priceless endorsement," but said housing and the economy were not out of the woods.
Falling home prices hurt homeowners psychologically and cause them to spend less, he said. The 68-year-old executive has worked in financial services for more than a half century.
"I've seen this movie before, and the ending of the movie always ends up in some form of recession," he said. "I can see the economy slowing down substantially enough to give the regulators, the Fed some pause in what's going to happen next."
Mozilo called on the Bush Administration and Fed Chairman Ben Bernanke to state that they will not allow the housing environment to get out of control.
Last Friday, the Fed cut the discount rate at which it lends to banks to 5.75 percent. Mozilo said it should be reduced so that it is the same as the federal funds rate, now 5.25 percent.
Others agree that more is needed.
"The Fed has cut the discount rate and added liquidity to the markets but those things aren't enough to turn the fundamental market around," said Phil Orlando, chief equity market strategist at Federated Investors in New York. He said the funds rate should be cut to 4.25 percent by year end.
GOING IT ALONE
Analysts have said Countrywide might lose mortgage market share to well-diversified commercial banks with deeper balance sheets, including Bank of America, Citigroup Inc, JPMorgan Chase & Co and Wachovia Corp.
Countrywide held a 17.4 percent market share from January to June, according to the Inside Mortgage Finance newsletter.
The Bank of America investment also raised speculation that the Charlotte, North Carolina-based company might eventually buy Countrywide, which Mozilo helped launch in 1969.
Mozilo said that was not happening. "We've gone it alone for 40 years and can go it alone for another 40 years," he said.
In an interview with CNBC television, Mozilo said markets are in "one of the greatest panics I've ever seen in 55 years in financial services."
Still, he rejected as "irresponsible and baseless" an August 15 report by Merrill Lynch & Co analyst Kenneth Bruce that downgraded Countrywide to "sell" from "buy" and said the company might face bankruptcy if market conditions worsen.
"There is no more chance for bankruptcy today for Countrywide than there was six months ago, a year ago, two years ago, and when the stock was $45 a share," Mozilo said on CNBC. "We're a very solid company."
Merrill spokeswoman Carrie Gray declined to respond to Mozilo's comments, and said Bruce wasn't granting interviews.
Countrywide shares closed up 20 cents at $22.02. They have fallen 48 percent this year.
(Additional reporting by Joseph A. Giannone, Ellis Mnyandu and Dan Wilchins)
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Too afraid to openly criticize, these cowards do what they do best: Signal others in the mortgage and real estate business to pile on and attack. The key words are signals. All you have to do is search one. I bet emails have already been blasted from coast to coast saying, "Look for 'vulturegram."
Bet the hackers and virus spam artists will active on Monday. Launching attacks from corporate sites. Or from allies tied to large law firms. Or organized crime gangsters.
Those keywords are not “signals.” They are “satire.”
Goona get rough.
today’s wsj
predicts there will be a downturn.
hello comrade hillary!
“he is making a prediction”
Praytell , where are all these homes that are going to destroy the economy.
There is nothing satire about it when the admins post things like this:
http://www.freerepublic.com/focus/f-news/1688081/posts?page=10#10
That frame other freepers for doing it, yet don’t post requests to show who did it prior:
http://www.freerepublic.com/focus/f-news/1688081/posts?page=33#33
Go ahead Petronski, you think it is satire, give the admins a ping and see if they will post who made these keywords.
Ha!
Did you add the keywords listed at your first link or not?
I did not. It did come from my account and a port of entry on my computer.
As to the first issue, the fact that you were assessed allegedly-false blame does not change the fact that the keywords ARE satire, just allegedly not yours.
As to the second issue, are you running a hardware firewall? (good) Are you running AOL in any form? (bad)
Ping to this post
That’s hilarious!!
As to the satire, it isn’t funny when things like this are posted: http://www.freerepublic.com/focus/f-news/1688081/posts?page=10#10 and frames people for web graffiti. That is not looked upon nicely on the web.
The post you link is not a frame. The post you link is an indication that posts were made in what you allege was a frame.
The only way the post you link is a frame as far as I can see it is if you are alleging the admin who posted that #10 list was part of the frame. If that is your claim, you seem in my view to be assuming facts not (yet) in evidence.
No response to post #56?
Then let who is posting them do so in the open under their logon.
As to the satire, it isn’t funny when things like this are posted...
Let the record reflect that the post you link is NOT what I referenced as satire.
Honestly and frankly, Calpernia, I think you should speak more bluntly about whatever you might be insinuating. It's going over my head. Out with it.
Maybe.
I agree: we should let them.
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