countrywide (aka enron) cans 12k employees

superadvisor · #1 09-08-2007, 06:08 AM

Hey guys you are forgetting they company officials say that the job cuts may be smaller if the market improves.... (sarcasm)

http://online.wsj.com/article/SB1189..._us_whats_news

#2 09-08-2007, 06:14 AM

superadvisor · #3 09-08-2007, 06:24 AM

blueman, because there is a very good chance the company is going to go under. The CEO already sold all $450 million of his shares, that shows you how much confidence the public should have.

Fishhead24 · #4 09-08-2007, 08:58 AM

Countrywide's strategy is to rely on its savings bank to provide funding for lending. That funding comes from deposits, as well as borrowings from the Federal Home Loan Bank system. The goal is to end reliance on short-term borrowings from jittery Wall Street firms and other creditors.

THIS WOULD BE ME.....

pig4bill · #5 09-09-2007, 01:05 AM

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I really don't get it. Usually when a company fires a bunch of people the market reacts to that positively and the stock goes up. Why is it a bad thing in this instance?

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Because the reason they are laying off so many people is they are closing branches and processing centers. If this company somehow survives, it will be much smaller than it was.

adios · #6 09-09-2007, 09:14 AM

One thing not mentioned is that it's obvious that even if CFC survives and resolves it's short term funding issues, they'll be significantly de-leveraged and doing a lot less loan production which means earnings will be way, way down if existent at all.

superadvisor · #7 09-09-2007, 09:28 AM

I'm very skeptical of Countrywides long term potential. Lending looks very bleak for the future and it seems that any and all lending for the coming years will have to be break even lending where the borrower gets a FAIR rate and the lender gets a TINY profit and I just don't see the volume or the quality of borrowers needed to make this fair lending market profitable for lenders.

Fishhead24 · #8 09-09-2007, 09:37 AM

Meanwhile they keep paying 5.4% to customers for their savings.

adios · #9 09-09-2007, 09:42 AM

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Meanwhile they keep paying 5.4% to customers for their savings.

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That may change though and eventually will. Lenders leverage the spread between short term and long term rates so I think develeraging is going to hurt CFC earnings alot.

superadvisor · #10 09-09-2007, 10:03 AM

I agree with adios. It's easy for Countrywide to give 5.4% interest on money when the money they are paying out in interest <u>DOESN'T EVEN EXIST</u> they are paying it out in debt and are only allowed to pay out the money because they are betting on their own survival, they are claiming that the money will exist at some point in the future. THE EXACT SAME THING HAPPENED IN ENRON. By lying to the public they were allowed to perpetuate the image that their company was worth $30+ something per share, once the whole ship had sank it was evident that those shares were only worth a few cents in real world money. wiki: MARK TO MARKET. The company MARKS their price and the market ASSUMES it to be true (until proven otherwise).