Herb Greenberg on BAC acquisition of CFC

Isnt that enough to see that the financial sector is in chaos?

Invest in banks, no, hell no.

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Updated: The Real Story on Countrywide….
4:54:56 PM January 10th, 2008

Permalink | Comments (5)
Updated to show Jon Najarian options insight.


We’ll know it soon enough, but with the leak that Bank of America is near acquiring Countrywide, several things would appear apparent (at least while we’re playing the guessing game):

1. The Fed is behind the deal.
2. The Fed is behind the deal because the rumors yesterday of a near bankruptcy were probably true.
3. As part of the deal, the Fed likely agrees to guarantee BofA against Countrywide-related losses.
4. Lost in the in the noise yesterday was that Moody’s downgraded the ratings on 30 (count ‘em — THIRTY!) tranches of Countrywide’s mortgage debt by more than a few notches. They did something similar before American Home Mortgage filed for bankruptcy.
5. Investors bid the stock higher assuming a premium when it’s likely that BofA still needs to fully assess the value of the assets before the deal’s full value will be known.
6. Big question, of course, is what Countrywide investors will get.
7. Rule of thumb with bankruptcies: Stocks often double on their way to zero.
8. BofA gets a free bank and a put to the government.

Menawhile, Jon Najarian of Optionsmonster.com writes, “To say there was HUGE unusual activity in Countrywide Financial ahead of today’s news that Bank America was close to finalizing a deal to buy the troubled mortgage giant would be as surprising as seeing Dennis Kucinich end his presidential run! We show over 304,000 calls traded against 248,000 puts, but the interesting thing here is that the bulk, some 76 percent of these calls were bought before the announcement! To us this means the likelihood of someone being tipped off was quite high. Like Burj Dubai Tower high!”

Onward.

所有跟帖： 

• will BOA go bankrupcy too? hehe. -pediatrician2- ♂ (0 bytes) () 01/10/2008 postreply 14:41:55

• :) if without FED, yes. With money from thin air, no. -山高月小- ♂ (225 bytes) () 01/10/2008 postreply 14:47:50

• CHINA很阳痿了。别指望他们敢开枪。奴性需要几代人才进化掉的 -pediatrician2- ♂ (0 bytes) () 01/10/2008 postreply 14:52:10

• Depends on the party line and geopolitical situation. -山高月小- ♂ (0 bytes) () 01/10/2008 postreply 14:54:54

• 顶. -thornbird888- ♂ (0 bytes) () 01/10/2008 postreply 15:06:08

• 不是奴性。是被人灌了药，变了性了。你看江，胡现在哪像男人？ -yogiho- ♂ (0 bytes) () 01/10/2008 postreply 15:35:44

• 那天看了胡的标准像,差点要笑出来,被人搞的都没原型了. -thornbird888- ♂ (0 bytes) () 01/10/2008 postreply 16:01:41

• 说实话,那日子也不见的好过. -thornbird888- ♂ (0 bytes) () 01/10/2008 postreply 16:12:40

• 越是阉的人，权欲越大。 -yogiho- ♂ (0 bytes) () 01/10/2008 postreply 16:19:07

• 心也就越狠,...许多外表的东西都是假的. -thornbird888- ♂ (0 bytes) () 01/10/2008 postreply 16:29:45

• 美国银行需要好好关停并转--- 吃利息的太多了 -xyz2001- ♂ (74 bytes) () 01/10/2008 postreply 17:28:55

• 银行都这样,可能是美国的经济有问题,...不应该这样的. -thornbird888- ♂ (17 bytes) () 01/10/2008 postreply 17:44:45

• Too much junk bonds, and junk currency. -:) -山高月小- ♂ (0 bytes) () 01/10/2008 postreply 18:09:32