Think hard for a minute. Who would you suspect most likely to profit from salvaging toxic mortgage sludge? How about the guys from Countrywide? Yeah, those guys. Countrywide’s former President, Stanford L. Kurland (what is it with guys named Stanford?) second chair to his bronzeness, have been buying up the refuse left behind by a number of banks under the auspices of “PennyMac.” (No, we aren’t kidding).
Of course, we like the prospect of private salvage crews working through the rubble to pull out the occasional only-slightly-dented toaster. And hey, Kurland had to go somewhere, right?
Mr. Kurland has raised hundreds of millions of dollars from big players like BlackRock, the investment manager, to finance his start-up. Having sold off close to $200 million in stock before leaving Countrywide, he has also put up some of his own cash.
While some critics are distressed that Mr. Kurland and his team are back in business, the executives say that PennyMac’s operations serve as a model for how the government, working with banks, can help stabilize the housing market and lead the nation out of the recession. “It is very important to the entire team here to be part of a solution,” Mr. Kurland said, standing in his office, which has views of the Santa Monica Mountains.
Must be nice.
Ex-Leaders of Countrywide Profit From Bad Loans [The New York Times]
Remember when Countrywide rolled out their internal PR slogan ” Protect the House” as the company was going up in flames. Little did we know Kurland & co meant “Salvage the House”. My slogan is
“Jail House”.
Next up, Stan o’neal and chuck prince form “The Lynch Group” to buy up the “good” businesses left behind their respective former employers.
next thing you know, they’re going to lever up that money (talf style) and purchase some new securitizations with “our” hard earned dollars:
http://online.wsj.com/article/SB123609012856118765.html?mod=todays_us_page_one
they put in a buck and we lend $0.92 – $0.94, makes sense to me.
btw, anyone notice wells today in free fall? did someone wake up and read the 10K? see you at $2…
step 1 start fire
step 2 run
step 3 return to fire with extinguisher
step 4 charge for extingush
step 5 collect bonus restart step 1
@3
So wingnuts are selling WFC?
NEW YORK (MarketWatch) — The administration’s mortgage plan got a huge endorsement Wednesday when Wells Fargo & Co. announced it will offer the government’s terms to homeowners who qualify.
In short, Wells Fargo (WFC:
9.15, -1.52, -14.2%) and its chief executive, John Stumpf, are embracing a plan sympathetic to Americans struggling with mortgage debt, and the bank is shunning so-called populist “tea parties” who say responsible Americans are paying for the bailout.
–
What’s in the 10K?
@4
Step 1.5 grab suitcase of cash by the door on your way out and kick your grandmother in the teeth before you slam the door in her face and lock it
@6 I would like to subscribe to your newsletter.
@5 – where do you want me to start? the loan portfolio? basically, the earnings release was a sham.
https://www.wellsfargo.com/downloads/pdf/invest_relations/2008_Exhibit13_pg103_168.pdf
they are carrying loans $14 bn above fair value because they intend to hold them until maturity. that is, if they reach maturity (pg. 143). that said, they look like saints compared to the hick from charlotte who overstated loans by $44 bn.
the common “equity” base of $67.8 bn is levered to the gills when you take into account the (a) aforementioned inflated loan “assets”; (b) goodwill of $22.6 bn (pg. 121); and (c) add another $19.8 bn of intangibles – $14 bn of “deposit intangibles” (pg. 120).
did I mention the bank has $1.3 trillion of assets? when you add it all up, the “cushion” looks like store brand one-ply toilet paper vs. 2 ply quilted charmin…the common is toast.
@5 – one more thing, forgot to mention the level 3 assets – $55.6 bn vs $22.7 bn last year. level 2 jumped from $64.4 to $350.3 bn. now compare that the tangible common number. looks like the wb acquisition is going to leave a mark.
For those of you in your twenties, this is a time honored tradition.
First you underwrite and sell the shit (while at a large well known firm).
Wait for it to explode in the buyer’s face.
Leave the well-known (or in some cases infamous) firm and start your own.
Selectively buy the shit back, because you already know where the bodies are buried.
Charge management fee, carry to repackage and resell.
Maybe you have Heard of Drexel Burnham, Goldman Sachs, Blackstone, Apollo, etc. etc. etc.
Marcus Licinius Crassus made money in Republican Roman times doing just this.
Setting fires to apartment blocks, waiting for people to sell at rock-bottom prices, then sending clients in to put out fire. Rinse. Repeat.
Too bad he met his end in Persia after a failed invasion attempt and having liquid gold poured down his throat in an effort to quench his “thirst for gold”.