Bank of America to buy Countrywide Financial

[MODU]

Well, my gamble with Countrywide didn't quite work out as I planned.  I was expecting it to stay low for a few more months then begin to creep up slowly, and at that point sell.  That means (as it stands right now), I would need BoA stock price to rise to $73 to break even.  Eh, it's possible.  At least they pay out a nice dividend, so I might make up some there as well.  Maybe Thornburg and RAIT will do better.  In any case, on with the news...

"Bank of America to Buy Countrywide"

CHARLOTTE, N.C. (AP) -- Bank of America Corp. said Friday it has agreed to buy Countrywide Financial for $4 billion in stock, a deal that both rescues the country's biggest mortgage lender and expands the financial services empire of the nation's largest consumer bank.

The acquisition will make Charlotte-based Bank of America the nation's biggest mortgage lender and loan servicer.

"Countrywide presents a rare opportunity for Bank of America to add what we believe is the best domestic mortgage platform at an attractive price and to affirm our position as the nation's premier lender to consumers," Bank of America chief executive Ken Lewis said in a statement.

The buyout come less than five months after Bank of America plugged $2 billion in Countrywide Financial Corp. during the height of the summer's global credit crisis, and just weeks after Ken Lewis vowed that making a deal in the mortgage industry would require him "to eat about seven years of my words."

(Cont...)

[Grumpier Than Uncle Joe]

This may have a calming effect on the mortgage market.  And BOA will make money if they're careful.

Win/Win.

[MODU]

This may have a calming effect on the mortgage market.  And BOA will make money if they're careful.

Win/Win.

Pretty much.  Can you imagine the potential upside if they are able to restructure the high-risk loans and then the housing market stablizes?  It's a sudden cash cow for a relatively small investment on their end.

[2952-0-0]

And, in four months, BoA goes to the Chinese/Singaporean/Dubai government funds and begs for $10 billion...

[JSojourner]

Anyone taken time to research the golden parachute for Angelo Mozilo, whether he retires, resigns or is fired? 

People cluck their tongues about our lack of shame as a nation over the immoral behavior of certain celebrities.

Where is our national sense of shame over this? 

[MODU]

Anyone taken time to research the golden parachute for Angelo Mozilo, whether he retires, resigns or is fired? 

People cluck their tongues about our lack of shame as a nation over the immoral behavior of certain celebrities.

Where is our national sense of shame over this? 

I haven't seen it listed yet, though I'm sure it is in my annual report somewhere (I tend to skip that section).  As far as golden parachutes go, I don't mind them making a lot of money, even if they are forced out.  However, I think there should be a performance clause based on employee count growth/loss, average wage increase/loss, and profit gains/losses.  If all three are over 5% gains, then they receive a sizable bonus upon leaving.  If it is positive growth but less than 5%, then it's a minimum bonus.  Anything under the breakeven point results in an equivallent loss from their exit package.  So, if the company drops 25%, their exit package drops 25%.

[JSojourner]

Anyone taken time to research the golden parachute for Angelo Mozilo, whether he retires, resigns or is fired? 

People cluck their tongues about our lack of shame as a nation over the immoral behavior of certain celebrities.

Where is our national sense of shame over this? 

I haven't seen it listed yet, though I'm sure it is in my annual report somewhere (I tend to skip that section).  As far as golden parachutes go, I don't mind them making a lot of money, even if they are forced out.  However, I think there should be a performance clause based on employee count growth/loss, average wage increase/loss, and profit gains/losses.  If all three are over 5% gains, then they receive a sizable bonus upon leaving.  If it is positive growth but less than 5%, then it's a minimum bonus.  Anything under the breakeven point results in an equivallent loss from their exit package.  So, if the company drops 25%, their exit package drops 25%.

Now see, that's reasonable.

What torques me off is when creeps like Jim Magliochetti at Dana Corporation cry poverty -- tell workers they have to take massive cuts in pay and benefits ($17 an hour in Dana's case) in order to remain solvent -- and then Maggs gets a bonus of several million.  If money is tight, money is tight.

That said, I have read occasional stories about CEOs who cut their own pay or refused bonuses because they felt they didn't perform well -- or because the company was struggling.  I really respect that kind of leadership.

[MODU]

That said, I have read occasional stories about CEOs who cut their own pay or refused bonuses because they felt they didn't perform well -- or because the company was struggling.  I really respect that kind of leadership.

I'm trying to remember who it was, but one of the CEO's worked for one dollar one year.  Even if it's a gimmick, I think CEO's of large corporations should do that once in a while.  Smaller corps tend to pay their upper brass less, so I wouldn't expect as much of a "sacrifice" from them.

[Ban my account ffs!]

I find this whole thread hilarious.

[MODU]

Anyone taken time to research the golden parachute for Angelo Mozilo, whether he retires, resigns or is fired? 

Here you go:

"Countrywide's Mozilo To Leave In Luxury"

Mozilo will reportedly receive up to $115 million in severance in cash and stock if he resigns or is fired.

[JSojourner]

Anyone taken time to research the golden parachute for Angelo Mozilo, whether he retires, resigns or is fired? 

Here you go:

"Countrywide's Mozilo To Leave In Luxury"

Mozilo will reportedly receive up to $115 million in severance in cash and stock if he resigns or is fired.

How revolting.

Thanks MOD

[MODU]

Just for your amusement:

One of my stocks (Thornburg... listed above) ran into a wee-bit of a problem with paying off one of their margin calls.  OOPS!  As of 2:25pm, the stock is down 57.8%!  Worries of bankruptcy now lingers.  hahaha . . . oh well, let's see where it goes from here. 

5-day chart:

[Smash255]

Just for your amusement:

One of my stocks (Thornburg... listed above) ran into a wee-bit of a problem with paying off one of their margin calls.  OOPS!  As of 2:25pm, the stock is down 57.8%!  Worries of bankruptcy now lingers.  hahaha . . . oh well, let's see where it goes from here. 

5-day chart:

Do you hold a lot of shares?

[MODU]

Do you hold a lot of shares?

Nah, not a lot.  Around 200 shares or so.  Just enough to get into the sector incase it bounced up.  Looks like I got in a bit too soon.    This is why you only invest money you can afford to lose.  hahaha

[MODU]

TMA is down another 59% this morning.  Ahhhhh . . . you gotta love it.

[Smash255]

TMA is down another 59% this morning.  Ahhhhh . . . you gotta love it.

Before you know it, it will be a penny stock

[MODU]

TMA is down another 59% this morning.  Ahhhhh . . . you gotta love it.

Before you know it, it will be a penny stock

hahaha . . . thanks for the encouragement. 

Of course, this goes back to my sermon about only investing money you can afford to lose.