Countrywide Financial -- CEO dumps stock, LATimes Reports Run on Bank

[FourScore]

Countrywide CEO sold 40M shares in 2007
By Kristin A. Lee, AP Business Writer | August 16, 2007

NEW YORK --As Countrywide Financial Corp.'s shares lost more than half their value this year, Chairman and Chief Executive Angelo Mozilo sold about $152 million in stock under a prearranged trading plan.

After reaching an all-time high of $45.26 on Jan. 26, Countrywide stock lost more than half its value as the market for subprime mortgages, or loans to consumers with poor credit, deteriorated.

On Thursday, Countrywide shares bottomed out at a four-year low of $15 after the lender said it borrowed $11.5 billion from a group of 40 banks to fund loans. Meanwhile, Mozilo has sold more than 4 million shares of stock this year for a total of $152 million. The transactions were reported in about 75 separate Securities and Exchange Commission filings.

Mozilo's stock sales are conducted under a prearranged 10b5-1 trading plan, which allowed the CEO to set up a program in advance for the transactions and proceed with them even if he came into possession of material nonpublic information.

Since the beginning of 2006, Mozilo has sold about $247.9 million worth of Countrywide shares...

http://www.boston.com/business/articles/2007/08/16/countrywide_ceo_sold_40m_shares_in_2007/

AND

A rush to pull out cash
Worried about the stability of mortgage giant Countrywide Financial, depositors crowd branches.
By E. Scott Reckard and Annette Haddad
August 17, 2007

Anxious customers jammed the phone lines and website of Countrywide Bank and crowded its branch offices to pull out their savings because of concerns about the financial problems of the mortgage lender that owns the bank.

Countrywide Financial Corp., the biggest home-loan company in the nation, sought Thursday to assure depositors and the financial industry that both it and its bank were fiscally stable. And federal regulators said they weren't alarmed by the volume of withdrawals from the bank.

The mortgage lender said it would further tighten its loan standards and make fewer large mortgages. Those moves could make it harder to get a home loan and further depress the housing market in California and other states.

The rush to withdraw money -- by depositors that included a former Los Angeles Kings star hockey player and an executive of a rival home-loan company -- came a day after fears arose that Countrywide Financial could file for bankruptcy protection because of a worsening credit crunch stemming from the sub-prime mortgage meltdown...

http://www.latimes.com/business/la-fi-countrywide17aug17,0,1835165.story?coll=la-home-center

[Hydra]

1. K&R

"Don't panic! Don't panic!"

It's been awhile since I've seen a run on a bank. This can't be a good sign.

[Sapere aude]

2. Go to Potter, he's paying 20 cents on the dollar!

[snappyturtle]

3. I find talk of this nature to be unnerving....scary. I wish someone

could see six to twelve months into the future and tell us what's going on then so we know where we are headed.

[Capn Sunshine]

4. Mozilo's stock sales are conducted under a prearranged 10b5-1 trading plan

which allowed the CEO to set up a program in advance.
Mozillo didn't see the giant ratfuck from the Wall Street banks coming; he assumed he was safe from such piracy.

It's no coincidence someone wants Countrywides stock to crash. It's like Potter all, right, and that's what they are trying to do; get a big piece of Countrywide's assets on the cheap.

Meanwhile, Countrywide purchased three more firms this month and is hiring over 500 new loan officers.

[mile18blister]

5. Help? What do I do?

I have a money market account at Countrywide but I'm within the FDIC limit. I opened the account with Countrywide because their rates were far higher than what WaMu is paying. (WaMu is another subprime lender). Countrywide bank offices are basically storefronts - no tellers, no cash to withdraw, no ATM machines, etc,. I thought the barebones bank services was a major reason their interest rates were so high. Do I rush over to the hole-in-the-wall local branch and close out my account and trasfer it to another bank? Or do I ride it out and trust that FDIC is still a valid entity? I didn't realize the subprime meltdown would have an immediate direct affect on my savings, so I confess I wasn't following it as closely as I should. All I wanted was to have a FDIC savings account that paid good interest.

I went through something like this in the 1980's with an S&L that got into trouble. The only problem I had then was to change my account number several times when the S&L (and later bank), was bought and merged serveral times. So should I panic, or just wait it out? Or is it already too late?

Anybody have any advise?

[bleedingheart]

7. if your account if FDIC insured ..you are safe

as long as you don't have more than the limit..(which you don't have currently)

If it failed..it might take some time to get your money...so....if there was a serious risk of failure...I would move the checking/savings to another bank....to insure liquidity if that event occurred...cuz I am not sure how your checks would fair if the entire bank would go belly up..

[Selatius]

8. Get your money out. The bank will probably declare bankruptcy at this rate.

When it declares bankruptcy, it will be much more difficult to get out your money than if you get it out now.

[daninthemoon]

6. Got a stupid question. Does a "run on the bank" at countrywide

pose any danger to those of us with mortages through them?

[dodger501]

9. I have the same stupid question

My mortgage is with these guys, what effect will this have on me?

[KAT119]

10. No-If Countrywide shopuld go bankrupt, it would be bought by another

similar type institution who would collect mortgage payments--which financial institutions always want to collect.

Unlikely the Fed. will let Countrywide go under--they bailed out the S N L's in 80's.

Rumors that this credit deflation/tightening is an engineered recession (that we are already in) and is a pretext for NAU (North American Union) regionalization for a global monetary system desired by neo mercantile institutions--e.g.oil, Big Pharma etc.

This is just the tip of the iceberg (crisis in stock mkt) of the overall meltdown/gutting of US to introduce the Amero currency for Mexico/USD and Canada!!

See (www.theprisonplanet.com)

www.stariq.com (newscope article on Federal Reserve by Michael Wolfstar) states that by January '08 very strong economic changes will be put in place as the US meltdown continues financially. Countries worldwide are quietly dumping the dollar--esp. oil countries & China is threatening as Treasury 's Paulson threatens them and their trade practices.

The Euro is now the world's reserve currency....

[daninthemoon]

11. Thanks. That's somewhat reassuring on this point.