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Investing

Is Countrywide (CFC) Worth $0

Photo of Douglas A. McIntyre
By Douglas A. McIntyre Published

One of the interesting by-products of S&P cutting Countrywide’s (CFC) debt to junk is that Bank of America (BAC) may be frightened witless now about taking over the mortgage banker.

According to MarketWatch, the ratings agency said that "there is no assurance that any of Countrywide’s debt will be "redeemed, assumed, or guaranteed" after their pending merger, according to the ratings agency."

The fact that Countrywide’s portfolio and balance sheet are in free fall make it as likely that the financial firm will go bankrupt as it is that BAC will close the transaction.

Friedman, Billings, Ramsey took a very dim view of the S&P downgrade and cut Countrywide to "underperform" from "market perform," according to Reuters. The brokerage cut its target on Countrywide’s stock to $2 from $7.

Housing is getting worse and not better. Defaults are rising not falling. The FBI is looking at CFC’s lending and disclosure practices.

What is Ken Lewis, the CEO of Bank of America saying? Probably "pull out before we get hurt."

Douglas A. McIntyre

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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