"Countrywide has longstanding and time-tested funding liquidity contingency planning," said Eric P. Sieracki, Chief Financial Officer. "These planning protocols were designed to encompass a wide variety of conditions, including recent secondary market volatility. Our liquidity planning proved highly effective earlier during 2007 when market concerns first arose about subprime lending, and remains so today. We place major emphasis on the adequacy, reliability and diversity of our funding sources. It is important to note that short-term liquidity is used exclusively to fund our highest credit quality, most liquid assets.This is kind of interesting: A $14 billion company needs "almost $50 billion of highly-reliable short-term funding liquidity" as a cushion. A cushion for what? Overleverage?
"Our mortgage company has significant short-term funding liquidity cushions and is supplemented by the ample liquidity sources of our bank," Sieracki continued. "In fact, we have almost $50 billion of highly-reliable short-term funding liquidity available as a cushion today. It is important to note that the Company has experienced no disruption in financing its ongoing daily operations, including placement of commercial paper.
"Countrywide's financial condition remains strong, as evidenced by over $14 billion of net worth, significant excess capital and our strong investment grade credit ratings," Sieracki concluded. "Two independent credit rating agencies, Moody's Investors Service and Standard & Poor's Rating Service, this week re-affirmed their ratings and stable outlook for Countrywide, its bank and its mortgage company."
Hmmm I see CFC is getting pounded after hours. Here is the headline: Countrywide Hit by Credit Market Woes.
Countrywide Financial Corp. faces "unprecedented disruptions" in debt and mortgage-finance markets that could hurt earnings and the company's financial condition, the Calabasas, Calif., lender said in a regulatory filing. (Read the SEC filing)Let's Review
The company, the largest U.S. home mortgage lender in terms of loan volume, said reduced demand from investors is prompting it to retain more of ...
August 2: It is important to note that the Company has experienced no disruption in financing its ongoing daily operations, including placement of commercial paper.
August 9: Countrywide Financial Corp. faces "unprecedented disruptions" in debt and mortgage-finance markets that could hurt earnings and the company's financial condition, the Calabasas, Calif., lender said in a regulatory filing.
I would like for the SEC to investigate the discrepancy between those two stories. Exactly when did Countrywide face "unprecedented disruptions" and exactly when was today's filing was prepared?
While the SEC is investigating that they may as well start looking into stuff like this:
The associated press is reporting Countrywide Financial Chief Executive Angelo R. Mozilo Exercises Options for 92,000 Shares.
The chairman and chief executive of mortgage lender Countrywide Financial Corp. exercised options for 92,000 shares of common stock under a prearranged trading plan, according to a Securities and Exchange Commission filing WednesdayLet's do the math. $14.05 * 92,000 = $1,292,600
In a Form 4 filed with the SEC, Angelo R. Mozilo reported he exercised the options for shares on Wednesday for $14.69 apiece and then sold all of them the same day for $28.74 apiece.
That's a pretty big vote of no confidence. And it's surprising too given the August 2 statement by Eric P. Sieracki, Chief Financial Officer: It is important to note that the Company has experienced no disruption in financing its ongoing daily operations, including placement of commercial paper.
CFC 60 minute Chart
(click on chart for a sharper image)
Rest assured there are going to be lawsuits over this.
Mike Shedlock / Mish
http://globaleconomicanalysis.blogspot.com/
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