The sinister plot reveals itself. Here we were worried about the burgeoning inventory of REOs of Countrywide's books. I guess this is why Angelo Mozilo gets the big bucks while your host begs for fishy treats and scooby snacks. As it turns out this streategy of Countrywide owning 2400 houses in California alone is not some consequence of loose lending practices but rather a very profitable investment strategy in that safest of all asset classes, SoCal luxury housing. Check this Moorpark sweet deal:
That wily Mozilo scooped this little beauty into their portfolio on 06/01/2007 for a paltry $1,311,316 and look, already zillows for $400,000 more. And what a deal, Countrywide will let you have it for a mere $1,499,000. Win-win-win.
And just around the corner from the Dawg Pound™ World Headquarters:
410 Avocado Place, 93010
* Zestimate: $1,175,852
* 30-day change: -$65,869
* Value Range: $1,081,784 - $1,352,230
At first blush it may look like "the smartest guy in the room" took it up the pinstripes on this deal but wait, there's more. CFC on 05/01/2007 paid only $929,250. Even the zillow zestimate of a $65k drop barely dents the fat cushion of instant equity. And don't cry for the previous housemoaner. On 09/13/1999 they paid $520,000. So they've pulled $400k of high on the hog lifestyle out of the very same house. $50k/yr buys a lot of lifestyle. When you run with the big dawgs you gotta pay for your kibble.
So. Is Aneglo "Tan Man" Mozilo the smartest guy in the room or what?
16 comments:
First!
And might I just add, seeing CFC down another 2 dollars today...kaching kaching..that's 8 more grand babeee...
Total..bought at 29.30, down to 22.49, that's 28 grand babeee!
Can't get freedy, now might be the time to pull the plug..what's it been, a week?
Bulls, bears, pigs...
Those are puts not shorts right? Not investment advice but with the Merill downgrade I'd see how low it can go and pull the trigger on a volume uptick. But WTF do I know? my corn futures are flatline.
CFC could collapse tomorrow, but the more likely scenario in my opinion is that they hold on by the fingernails for another few months, maybe even a year or so. I suspect there's at least one more short squeeze in the works, and it could be a big one. If anyone short insists on holding tight, they had better have lots of margin available to meet the calls.
So what's CFC doing in the loan biz if they can make such a killing selling RE?
Incidentally, back east the credit crunch is putting the squeeze on sweet commercial dealz.
And cracks seem to be appearing in the upper end of the real estate spectrum.
And OMG is it true? The overdevelopment of New York is finally starting to show in the form of some gawdawful eyesores.
So now we know why he sold $2 mill worth of stock earlier in the month.
Good price for a retirement home along with enough cash to build a koi (that is a kind of fish) pond.
H.
Hey gang, got a question: What lenders and builders do those of you shorting the market have in your portfolio?
I currently hold PUTs in CFC, IMB and BZH. Just recently ditched my LEND.
I also bought shares of SRS which is an ETF that is shorting the housing sector.
Curious to see where you all got your bets placed. :-)
I have no shorts or puts. Call me tinfoil but I see such blatant market manipulation that I'm not in the least attracted to trying to make money there.
Dawg,
I'm with you. Just when you think they're primed to take in in the seat they blast off. Too dangerous for shorting outright, but January puts in some of these builders could be attractive. There's only so long they can prop this thing up with toothpicks.
'We can deal with the bailout charge quickly -- it was nothing of the sort. In the face of a temporary shortage of cash in the system, the Fed and other central banks lent money to some big banks, taking as collateral bonds issued or backed by the U.S. government. When the markets returned to normal a couple of days later, the banks got their bonds back and the Fed got its cash back, with interest. By fulfilling its mission as the prudent lender of last resort, the Fed did nothing to prevent the inevitable reckoning that awaits investors and lenders who made bad decisions.
Rushing to lower interest rates, on the other hand, would be the wrong move for the Fed. It would interrupt at a too-early stage the process of wringing out the excessive debt that has built up in the economy and in the financial system during the years of cheap and easy money. And it would send the dangerous message that the Fed will be there to ride to the rescue the next time Wall Street decides to gorge on big fees and excessive risk.'
This gent is a regular in The Washington Post. The quote comes from today's article/opinion
http://www.washingtonpost.com/wp-dyn/content/article/2007/08/14/AR2007081401783.html
list of recent articles
http://www.washingtonpost.com/wp-dyn/content/linkset/2005/03/24/LI2005032400138.html
Could he be a regular here in EN?
I like the look of SRS actually. Might buy it next time they pump out some rosy report and it dips.
Interesting point Rob.
Maybe CFC will become a residentail REIT?
BAKERSFIELD:
There's no way that they can continue to be this successful in this market!
Deadder-than-a-doorpost by June '08 says I.
CFC will not go under. Takeover or takeunder or strategic partnership or whatever. Cramer might be right about a BofA type arrangement.
Whatever the outcome, 'ol Tanface will have the goldenest of golden parachutes to jib up his 280' yacht.
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