24/7 Wall St. will look at the Twitter posts at Reuters Biz, WSJ, Financial Times, CNN Money, MarketWatch, CNBC, and 24/7 Wall St. each day to see which stocks are most frequently mentioned. It is clear that in this area of social media these tweets are a sign of which companies the Twitter universe is interested in. Together, these financial sites are followed by nearly 1,000,000 Twitter users, which makes them a sizeable sample of Wall St.’s interests. In some cases, we will publish the actual tweets from the sites

Bloomberg: BP Investor Lawsuit to Be Led by New York, Ohio Pension Funds http://bit.ly/hUpagA $CAM $HAL $RIG $XOM

Reuters: China changes rare earth quota basis, cut by 35 percenthttp://reut.rs/fH4FYe

Reuters: Ohio and New York state pensions named plaintiffs in BP casehttp://reut.rs/eRmuLs

MarketWatch: Groupon files to raise up to $950 mln: reports http://bit.ly/hZqJ0T

Zerohedge: Allstate lawsuit vs BofA lists private address of Angelo Mozilo: 2816 Ladbrook Way, Thousand Oaks, CA 91361

Daily Finance: Commodities Surge as China Slashes Rare Earth Exportshttp://aol.it/h8AEDN

Daily Finance: iPhone 4 Tops eBay’s ‘Top Shopped’ List http://aol.it/hIBOR3

Douglas A. McIntyre

Before you think that we are just calling for him to leave openly, we are not.  In fact it is the opinion of 24/7 Wall St. that he has dodged the biggest bullets already and that the board of directors won’t try to fire him nor that they will be pressured to.  This is even sort of his show as far as we are concerned because he’s not only Chairman and CEO.  He’s also the founder.

This is actually a prediction piece, and 24/7 Wall St. thinks that at some point in 2008 when and if the dust settles in all the mortgage soup that Mozilo will announce his retirement and succession plans.  But…. we think that the retirement may only be as CEO and it is possible that he’ll stay at Countrywide as non-Executive Chairman.  We also believe that he’ll be able to take basically as long as he wants to name a successor and it may be 2009 before he is out.  He’s roughly 68 years old, so he isn’t at any crucial age in today’s world.

All things being equal, it is also the belief of 24/7 Wall St. that  Countrywide will survive and likely thrive again in the future.   That may of course change if there are more insurmountable developments that come across the news tape, but that is our opinion as of today.  It’s obviously not entirely out of the woods but it isn’t in the graveyard either.  Shares are down almost 75% from 52-week highs of $45.26, but they are also up almost 50% from lows of $8.21 in recent weeks. 

• While the criticisms have been harsh, we do not actually hold his personal stock sales as anything we’d raise much of a stink about like many others have.  These sales were all under a planned 10b5-1 sale program and he was never a serial stock seller before.  His case to the SEC inquiry should actually be easy to prove that he didn’t get to sell out at the top and leave everyone else holding the bag.
• He didn’t do Bank of America (NYSE:BAC) any favors when he came out the day after their $2 Billion equity stake and predicted on CNBC that the U.S. economy is almost certain to go into a recession.
• Press about Countrywide paying large bonuses to their mortgage brokers when the mortgage was a bad deal for the home buyer didn’t help.
• Analysts are still well above current stock prices with their older price targets that haven’t been fully updated.
• Some have called for the axing of Mozilo.  They were also hit quite hard for the harsh wording in their SEC Filings
• Mozilo in an interview yesterday with CNBC’s Maria Bartoromo said he had discussed this current mortgage bailout package with Paulson, so if this actually comes to pass it will likely be the stabilizing act that keeps the company easily intact and out of the public spotlight like it had been in recent weeks and months.  But the sub-prime rate freeze may help him as long as there are not waves and waves of foreclosures.

because everyone ran for the hills.Once again, we do not believe that Mozilo can’t survive nor do we believe that he has to leave the company as of today.  We just think he’s going to announce a quasi-retirement that won’t really be a full retirement.

GUIDELINES FOR CEO’s THAT NEED TO GO

Jon C. Ogg
December 6, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Just when it seems that the mortgage madness is trying to work itself out, there was a surprise in the piles of mail this weekend: a 40-year mortgage offering from Countrywide Financial Corp. (NYSE:CFC).  It seems that the lenders are still willing to play financial games to keep loaning money.  Unfortunately this isn’t really new at all.  But it shows that at least this lender is willing to keep the games alive in overextending credit.

Back in 2006, Bankrate.com was reporting on the proposed 50-year mortgages.  Japan had or has those 100-year mortgages available so that children (and maybe Grandchildren) can buy and own property that would otherwise be unavailable.

The current 30-year and even 15-year mortgages are sort of a hoax when you consider the fact that the amortization table is almost entirely interest upfront.  On a 30-year mortgage with a 6% interest rate with a $1,798.65 monthly payment, a borrower at month 60 still owes $279,163.07 in principal.  The same 6% rate mortgage for 40-years has a $1,650.64 payment, but at month 60 the remaining principal is $289,489.78.  The 15-year mortgage with a 6% rate is much more expensive with a $2,531.57 payment but is at least a bit more skewed with the principal remaining at month 60 as $228,027.30.

The value of dirt usually appreciates through time.  But many of these newer structures built don’t seem to be built as sound as prior generations of homes.  The thought of some of these three-story toothpick structures having a 30-year life seems like a stretch.  There is no doubt that these ‘more creative mortgages’ make what would have been out of reach into something more attainable.  But that is still part of the problem. 

Maybe this is a harsh assessment here, but it really just seems that many U.S. borrowers still need to be renters rather than temporary owners.

Jon C. Ogg
October 15, 2007

Many of the pre-packaged quarterly disclosure statements and possible scenarios outlined herein sound ghastly as well, but these are frequently covered as risk factors in every filing.  After a huge down day like today, it’s no wonder that after-hours trading is being so hard on Countrywide.  After this reaction to a quarterly filing, you can bet that Countrywide’s CEO Angelo Mozilo will be on CNBC and elsewhere in media outlets Friday trying to bring about at least some calm and to state that many of these disclosures are routine (or at least somewhat) in the sector.

The company has also said that it believes the changes may hurt near-term but will ultimately help it in the long-run.  (If this was truly believed on the surface, then the shares wouldn’t be down over 10% in after-hours.)

Page 94 OFF BALANCE SHEET TRANSACTIONS
….
We do not believe that any of our off-balance sheet arrangements have had, or are reasonably likely to have, a current or future material effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources.

Our material contractual obligations were summarized and included in our 2006 Annual Report. There have been no material changes outside the ordinary course of our business in the contractual obligations as summarized in our 2006 Annual Report during the six months ended June 30, 2007.

Here are some of the comments on the next page out of the end of the SEC filing that are hitting the stock:

P.94 PROSPECTIVE TRENDS…. Outlook

We believe the current environment of rapidly changing and evolvingmarkets will provide increasing challenges for the financial servicessector, including Countrywide. Specifically, in the near term, we mayexperience:

·  Continued pressure on housing values and mortgage origination volumes
·  Increasing delinquencies and foreclosures
·  Continued disruptions in the secondary mortgage and debt capital markets and
·  More restrictive legislative and regulatory environments.
As a result of these conditions, Countrywide and other lenders may be experiencing, among other things, the following:
·  Lower loan production volumes
·  Lower margins on loans produced
·  Higher credit losses on delinquent loans and subordinated interests
·  Reduced access to secondary mortgage and debt capital markets and
·  Increased cost of debt.

In response to the current environment, Countrywide is making changesto tighten the underwriting guidelines for loan products offered andadjusting loan pricing to reflect market conditions. Further reductionsin the Company’s funding volume could result. Additionally, we expectto retain more loans in our portfolio of loans held for investment orto hold additional loan or security inventory until market conditionsimprove. In an effort to ensure the adequacy of our funding liquidity,we continue to transition
to more reliable funding sources, which may be more costly. We are alsooptimizing our organizational structure through, among other things,the planned integration of Countrywide Bank and Countrywide Home Loans.

While we expect these conditions may impact our earnings in the nearterm, we believe that the challenges facing the industry shouldultimately benefit Countrywide as the mortgage lending industrycontinues to consolidate.

P. 96 Housing Values

Housing values affect us in several ways……

Recently, we have seen housing price declines, including recentdeclines in housing values in many metropolitan statistical areas inthe United States. We expect housing values to remain stagnant ordecrease during the near term which will affect our credit lossexperience and may affect our willingness to offer certain mortgageloan products, both of which could impact our earnings, particularly inthe short term. Over the long term, we expect that housing appreciationwill be positively correlated with both consumer price inflation andgrowth in personal income.

P.96-97 Secondary Mortgage Market Investor Demand

Changes in investor demand for mortgage loans can have a significantimpact on our ability to access the secondary mortgage market as acompetitive outlet. In 2007, we have seen an increase in investorrequired yields, first for nonprime loans or securities followed byprime home equity loans and then nonconforming loans, together with alessening in the liquidity of such loans and securities caused byreduced investor demand. In addition, certain credit rating agencieshave announced that changes are pending to their securitization ratingsprotocol. These factors have reduced our ability and
willingness to sell such loans or securities into the secondarymortgage market and the availability and pricing of such loans toconsumers. Our gain on sale margin may be impacted in the short term.

P. 97 Impact of Declines in Credit Performance

With the current contraction in the U.S. housing market and theresulting slowdown in price appreciation (or price depreciation in manymarkets), along with worsening economic conditions, we may experienceincreased credit losses in the near term. In 2007, we have observed amarked decline in credit performance (as adjusted for age) for recentvintages, especially those loans with higher risk characteristics,including reduced documentation, higher loan-to-value ratios or weakcredit scores. Deterioration in the credit performance of these loanshas resulted in increased credit losses and impairment of our relatedcredit-subordinated interests and higher claims under ourrepresentations and warranties. Credit markets are rapidly changing andevolving and we expect these changes to impact the housing market,demand for our mortgage-backed securities, our future credit losses andthe availability of credit enhancements for the loans and securities wesell and invest in, which may impact future earnings.

P. 97 Funding Liquidity

In the third quarter through the filing date of this Form 10-Q, fundingliquidity in the financial services sector was constrained primarilydue to changes in secondary mortgage market investor demand. Variousmortgage lenders have experienced operating difficulties and haveextended asset-backed commercial paper facilities or filed forbankruptcy protection. These events have further constrained fundingliquidity in the sector.

We have maintained access to our traditional, highly reliableshort-term liquidity sources. In view of current unprecedented marketconditions, we are accessing other pre-existing funding liquiditysources, procuring new sources and accelerating the integration of ourmortgage company with the Bank. As a result of this acceleratedintegration, a significantly higher percentage of our mortgage bankingfundings will occur in the Bank sooner than originally planned. TheBank has significant liquidity sources available to fund our mortgagebanking operations. While we believe we have adequate fundingliquidity, the situation is rapidly evolving and the impact on theCompany is unknown.

Right now opinion on this won’t matter.  A drop of this magnitude is hard to ignore, and this puts the stock back within striking distance of a 52-week low.

Jon C. Ogg
August 9, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.