Rumor: BoA to buy Countrywide

[WDCRob]

Re: Rumor: BoA to buy Countrywide

I've probably been hanging too long with people who think colanders make great headware, but I won't be at all surprised if we find out the Fed's behind this and the JPM deal and I'll guess we're well into Ben's list of formerly hypothetical actions with which to fight deflation.

When a story like this hits the front page of the Washington Post things are going from bad to worse in a hurry:

http://www.washingtonpost.com/wp-dyn...011103959.html

I also note that Finster will be pleased with the print version subhead: "top firm to be sold at a bargain." No 'capital infusion's here.

Humbly yours in tinfoil.

[olivegreen]

Re: Rumor: BoA to buy Countrywide

Colanders have holes in them: I recommend good old tinfoil... 60% mutual funds etc... who is the 40%?

[Jim Nickerson]

Re: Rumor: BoA to buy Countrywide

Colanders have holes in them: I recommend good old tinfoil... 60% mutual funds etc... who is the 40%?

People like you and me who have bought shares in BoA, but I am not one of them.

[jk]

Re: Rumor: BoA to buy Countrywide

2 pieces of info to keep in mind.

first,

from the askfleck column at bill fleckenstein's website

Bill,

I have spent the last 38 years in Charlotte and during my days playing "The Game" got to know several of the senior guys at NCNB (Nations Bank - BAC). They have very little clue as to what they inherited when Hugh McColl rigged the merger with B of A a few years back. B of A carried a huge play in California real estate related "stuff" including major lines of credit into the likes of CFC. The Charlotte guys are scared.

The idiots who thought putting $2B into CFC @ 18 are the same ones who think it's a good idea to
average down. The REAL reason is to cover their ass and avoid having to disclose their exposure. At the same time they are frantically trying to get FAS 114 changed so they won't have to disclose a huge hole in the value of those mortgage related assets. Just another attempt to hide reality among the biggest and baddest guys in the financial zoo.
• Your explanation makes sense to me because the deal itself makes no sense on the surface..BAC had to have an agenda - as you have explained.


second,
bank of america didn't just pay another $4billion [in stock, diluting their shareholders], it also took over the liability of over $100billion in countrywide debt.

[olivegreen]

Re: Rumor: BoA to buy Countrywide

The question is, can they play this game ad infinitum or will it "have out" as they say? Is there a reckoning?

[Tulpen]

Re: Rumor: BoA to buy Countrywide

At the same time they are frantically trying to get FAS 114 changed so they won't have to disclose a huge hole in the value of those mortgage related assets.

Do you have any proof or at least a reference for that assertion?

[Jim Nickerson]

Re: Rumor: BoA to buy Countrywide

Do you have any proof or at least a reference for that assertion?

I don't think that was jk's assertion, but rather someone who wrote Fleckenstein.

Tulpen, do you know when FAS 114 is to become effective?

[GRG55]

Re: Rumor: BoA to buy Countrywide

2 pieces of info to keep in mind.

first,

from the askfleck column at bill fleckenstein's website

Bill,

I have spent the last 38 years in Charlotte and during my days playing "The Game" got to know several of the senior guys at NCNB (Nations Bank - BAC). They have very little clue as to what they inherited when Hugh McColl rigged the merger with B of A a few years back. B of A carried a huge play in California real estate related "stuff" including major lines of credit into the likes of CFC. The Charlotte guys are scared.

The idiots who thought putting $2B into CFC @ 18 are the same ones who think it's a good idea to
average down. The REAL reason is to cover their ass and avoid having to disclose their exposure. At the same time they are frantically trying to get FAS 114 changed so they won't have to disclose a huge hole in the value of those mortgage related assets. Just another attempt to hide reality among the biggest and baddest guys in the financial zoo.
• Your explanation makes sense to me because the deal itself makes no sense on the surface..BAC had to have an agenda - as you have explained.


second,
bank of america didn't just pay another $4billion [in stock, diluting their shareholders], it also took over the liability of over $100billion in countrywide debt.

...and gawd knows what amount of exposure to future litigation.

[EJ]

Re: Rumor: BoA to buy Countrywide

...and gawd knows what amount of exposure to future litigation.

Good discussion. This is why we have focused our Debt Deflation Bear Market speculative shorting activity on the indexes via ETFs and negative index funds (see Time, at last, to short the market - 12/27/07) versus companies. You can do everything right to choose a short target only to short only to lose in a surprise takeover announcement or rumor. We learned this the hard way in the tech industry consolidation in 2001 - 2002 when Cisco for all intents and purposes became the only Enterprise networking company. Same will happen in financial stocks. Big, relatively healthy fish eat the sick fish, and there's no accounting for taste: motivations will not be on the surface. USPIX was the way to play it then. Similar situation today.

More profitable to short segments of the economy most vulnerable to a debt deflation such as tech (again) via USPIX, housing via SRS, etc.