Friday, January 11, 2008

Countrywide throw in the towel!

Bank of America to Acquire Countrywide for $4 Billion

"Bank of America Corp., the biggest U.S. bank by market value, agreed to buy Countrywide Financial Corp. for about $4 billion, five months after making a money- losing $2 billion investment in the unprofitable mortgage lender"

Posted by alan @ 01:42 PM (757 views)
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8 thoughts on “Countrywide throw in the towel!

  • A few days ago there was a thread on here about what would happen if Countrywide went bust. Just to remind ourselves, it is the USA’s biggest mortgage lender with a 14% market share. As we predicted, it has been bought up after seeing a massive decline in its share price (down 82% in a year!). Bank of America probably think they’re getting a bargain. Time will tell!

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  • Governments are absolutely terrible at running business – I have some experience of this – everything comes very, very political and, basically nothing gets done. Look at the NHS in the UK…..in fact, look at anything state run – it’s always a nightmare!

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  • Countrywide spam to try to get business! I wonder why they are in deep shit?

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  • @hpwatcher: Bank of America is a private company. You’re confusing it with the Federal Reserve, which is the equivalent of the Bank of England.

    Bank of America is the largest commercial bank in the USA. In Britain they own the MBNA range of credit cards, and they also operate credit cards for many other brands (providing branded credit cards for everyone from Virgin to the Caravan & Camping Club). They can easily absorb Countrywide Financial.

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  • @drewster, pardon me…thanks for the info.

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  • You’re welcome 🙂
    The government is aware of the deficiencies of state-operated companies. That’s one reason why they outsource everything in sight – PFI, PPP, etc. The other reason is union-bashing.

    Yet they still manage to screw up. The contract managers who remain after the rest of the department has been privatised have no experience in how things work in the real world. They’ve never run a large IT project or an underground tunnel dig. They have no background in engineering and precious little in project management. So the poor government buyer can’t tell if the vendor is telling the truth in its early estimates and later excuses. This seems to be a common theme of the modern era – people without relevant backgrounds jumping straight into management. I call it the Dilbert effect.

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  • “You’re confusing it with the Federal Reserve, which is the equivalent of the Bank of England.”

    Equivalent, yes – but the FED is privately owned. It’s one of the biggest scandals in history – basically a private bank was given the right to print America’s money in 1913. The Bank of England is state ownwed. That’s a very big difference.

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  • dohousescrashinthewoods says:

    Someone was saying last year that we would start to see consolidation as things got hairy.
    Lokks like that was spot on.

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