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No Savior for Mortgage Biz
http://www.thestreet.com/s/no-savior-for-mortgage-biz/newsanalysis/banking/10376597.html ^ | 8-28-07 | Laurie Kulikowski

Posted on 08/28/2007 6:45:15 AM PDT by Hydroshock

Edited on 08/28/2007 6:51:07 AM PDT by Admin Moderator. [history]

1. Countrywide Crushed Again 2. The Top Rocket Stocks for This Week 3. Dell Stumbles at Wal-Mart 4. Microsoft Still Cleaning Up With Windows 5. Weekend Reading

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Waiting to see big banks piling into the mortgage business a la Bank of America (BAC - Cramer's Take - Stockpickr - Rating)? Don't hold your breath.

BofA surprised Wall Street last week by making a $2 billion bet on struggling Countrywide (CFC - Cramer's Take - Stockpickr - Rating). The news, announced after the close last Wednesday, gave Countrywide's sinking stock a one-day reprieve.

The linkup also boosted smaller stand-alone lenders such as Thornburg Mortgage (TMA - Cramer's Take - Stockpickr - Rating) and IndyMac (IMB - Cramer's Take - Stockpickr - Rating), as investors wagered that commercial banks such as Wells Fargo (WFC - Cramer's Take - Stockpickr - Rating) and Wachovia (WB - Cramer's Take - Stockpickr - Rating) might make copycat moves.

But since last Thursday's mortgage industry relief rally, the shares of the big lending companies have resumed their swoon. The reason? The U.S. housing industry keeps getting sicker -- and observers are starting to appreciate what favorable terms BofA chief Ken Lewis wrung out of struggling Countrywide.

"It was a layup, basically," Mark Batty, a financial services analyst at PNC Wealth Management in Pittsburgh, says of the terms BofA got in its deal with Countrywide. "A lot of investors would have an interest in that type of investment opportunity."


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To: Greg F
I think a nice, small, guaranteed profit in this environment is a pretty good bet.

Which is why short term bond holders are not miserable. Which is what I said.

21 posted on 08/28/2007 8:33:53 AM PDT by Toddsterpatriot (Ignorance of the laws of economics is no excuse.)
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To: Toddsterpatriot

Oh, I was being sarcastic, you weren’t. Same page now.


22 posted on 08/28/2007 8:35:51 AM PDT by Greg F (Duncan Hunter is a good man.)
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To: Greg F
Is there something in the nature of conservatism that we are all supposed to be bulls? We are rocking! We are pumped! This is going to be a good freaking day to make some money!

I don't know anyone here like that. I do know many here who work far too hard to see doom and despair in every piece of news and consistently try to convince us that the sky is falling. This kind of person is impervious to facts proving otherwise and is, for the most part, ignorant of basic economics.

Personally, I get tired of hearing this claptrap endlessly repeated by the left and their willing accomplices in the media. When I see the same doom here, from the same people over and over again, I have to laugh when they get the ridicule they deserve. Willie Green's legacy lives on....for good and bad.

23 posted on 08/28/2007 9:06:55 AM PDT by Mase (Save me from the people who would save me from myself!)
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To: ex-Texan
This slow motion train wreck is just starting.

Ye've convinc't me, man!


24 posted on 08/28/2007 9:10:42 AM PDT by Lazamataz
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To: Mase
many here who work far too hard to see doom and despair in every piece of news

Well said bump.

25 posted on 08/28/2007 11:36:53 AM PDT by Fan of Fiat
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