BoA in Talks to Buy CountryWide Financial
>
Bank of America (BAC) is reportedly in advanced talks to by Countrywide Financial (CFC).
This is in direct contradiction to Dennis Gartman's #1 rule of trading:
1. Never, Ever, Ever, Under Any Circumstance, Add to a Losing Position... not ever, not never! Adding to losing positions is trading's carcinogen; it is trading's driving while intoxicated. It will lead to ruin
After that initial disastrous buy in at $18-20, BoA is doubling up -- at $6 . . .
Thursday, January 10, 2008 | 02:38 PM | Permalink
| Comments (83)
| TrackBack (0)
add to de.li.cious | 
digg this! | 
add to technorati | 
email this post
TrackBack
TrackBack URL for this entry:
http://www.typepad.com/services/trackback/6a00d8341c52a953ef00e54fc83d298833
Listed below are links to weblogs that reference BoA in Talks to Buy CountryWide Financial :
Comments
All BofA does is buy companies. Why stop now?
Posted by: Mike M | Jan 10, 2008 2:43:55 PM
Hmmm. Could this have been the reason for yesterday's late day rally, and not Ben's speech?
This is pure speculation on my part. But very interesting nonetheless.
(MS, ED, and others, your thoughts?)
Posted by: v | Jan 10, 2008 2:45:29 PM
PUMP AND DUMP.
DEAL WON'T MAKE.
Posted by: x-man | Jan 10, 2008 2:46:23 PM
I would hope that BAC shareholders reject this monumentally asinine and arrogant buyout. I don't know why they just don't let CFC go belly up, then swoop in and cherry pick their loan portfolio. It's not like any other large banks have the capital to outbid them now.
Ken Lewis has apparently been too busy making sure his employees watch An Inconvenient Truth (at work!) to do any sober financial analysis these days.
Posted by: CaptiousNut | Jan 10, 2008 2:47:56 PM
The last two days have seen a script better than any writer (on strike no less) could come up with.
The rally yesterday started at the August lows with a 3m share block (that's $840 million to you and me) and that greased the skids that caused shorts (weak ones at that)to fuel the rise of yesterday.
No coincidence that yesterday was ,in fact, the start of earnings season and the powers that be had already seen the retail numbers.
Fast forward to today and you have (surprise!!) bad retail numbers and another warning (COF) that sends the market down about a hundred points. Bernancke bails it out with yet another "speech". Now you have another 100 pt rally that fizzles and we get the BofA/CFC deal.
If this deal was even being talked about there would have been some leakage (especially in this day and age) and after we have yet another rally attempt (artificially created IMO) gone and these rumors surface.
Why not just say that Buffet is going to buy the whole market......or may be that one is just a bit overused.
BTW the ONLY thing bofA wants with CFC is the servicing biz. It will not be a buyout...it'll be some other convoluted deal but not an LBO......
Oh and we had another one of those "mystery blocks" of (yes you guessed it) 3million shares right before this rumor came out. Only one place in the world that is outfitted with that type of cash that can be used........
Total desperation (that is becoming increasingly obvious) and nothing more.
Ciao
MS
Posted by: michael schumacher | Jan 10, 2008 2:57:44 PM
This schmells like a "sweetheart" deal with the Feds.. BofA will take the cream and the taxpayer will take the toxic waste of CFC and will eat it just like the Sin Eater in the movie the Green Mile. Disgusting..
Posted by: GregorSamsa | Jan 10, 2008 3:08:40 PM
Add in that CDS payouts would have been the other shoe to drop if CFC declared insolvency.
So you saved another "non-impacted" business from having further payouts that they can't make.
That would have broken the market.
No comment today from CFC but they had to halt it's stock to discredit the filing talks from the other day.
This is total fucking bullshit and should be investigated fully (like that will ever happen) I can say it though..
TOTAL CRAP.....
Ciao
MS
Posted by: michael schumacher | Jan 10, 2008 3:13:26 PM
this whipsawing the market -1% to +1% on rumors of a buyout of one company, a $4b company, is IMO a sign of a rather unhealthy overall market that is not able to make SUSTAINABLE gains. the gruel being served by the bulls gets thinner and thinner each faux-rally.
Posted by: craig | Jan 10, 2008 3:14:05 PM
*uses market rally to sell into strength*
*goes to cash*
*e-mails thank you letter to BofA*
Posted by: m3 | Jan 10, 2008 3:15:29 PM
I'm too pissed off right now, to do anything but throw shit. and figure out how to make money in this market without day-trading my ass off.
I hate day trading...
That Reversal was a crazy move, That is a rare occurrence.
Technical bounce, followed by some manipulation similar to what MS is talking about, fueling a short covering rally. I'm going to look for a new opportunity to go short lightly into the close
But I expect for the crazy market moves to continue, it's part of the nature of a Bear, that it pummels the hell out of every one.
hard to complain since I'm killing it so far this year, but It hasn't been easy.
Hope that answers your question... I'm betting a continued short covering rally into the close....
Actually I just changed my mind, I'm just going to play it safe...
See if I can catch intraday moves.
500 point 2 day run. Insane.
Last thing you want to do is start over-trading..... or get into behavior more akin to a pinball, than a human being.
Posted by: Eric Davis | Jan 10, 2008 3:17:45 PM
if you guys are looking for something to short try oil... it didn't even move on the bernanke speech which means there are big sellers out there. Energy stocks are down in an up tape.
The big money in commodities is controlled by the trend followers. Once they start to roll over... look out below.
Now that's a real contrarian play..
Posted by: Vermont Trader.. | Jan 10, 2008 3:21:56 PM
I did that yesterday M3.....but I can still be pissed that yet again we get rally's that are manufactured (and totally blatant) from the current administration.
Desperation at it's FINEST.......
And the beauty of it is that it still won't work...
BTW all that does is buy CFC a little more time...they are still insolvent
Ciao
MS
Posted by: michael schumacher | Jan 10, 2008 3:22:10 PM
MS
3 million shares of what ? who sold it ( why do you only speak of the "side" who manipulates the trade , not the contra-side? )..... SPY trades 270 million shares today.... that's $38 Billion .... what's $840million in that?????? nothing .... your Tin-Foil Hat is a bit too tight
Posted by: BDG | Jan 10, 2008 3:33:51 PM
People are using oil(and oil service) during the down trends, and moving to other equities in the uptrend.
at least that is what I suspect.
Only thing we can count on is that we will trade from the downtrend to new lows. and lows to downtrend.
1440 into the close?
Posted by: Eric Davis | Jan 10, 2008 3:38:31 PM
nevermind what a 60% RISE in SP does to your capital ratio....that I'm pretty sure was the entire reason for this rumor.
and right on cue the news reads:
"CFC CDS no longer trading at distressed levels"
Which now wins the captain effing obvious award of the day.
Ciao
MS
Posted by: michael schumacher | Jan 10, 2008 3:38:37 PM
Sorry BDG but when that "nothing" amount of $840 million gets shoved at the SPY at the AUGUST lows you get to see what a truly manipulated market looks like
Apparently you do not pay much attention to the I-day sales...but that was obvious to me based on your caps lock button.
Nice try though.....
Ciao
MS
Posted by: michael schumacher | Jan 10, 2008 3:43:05 PM
I'm starting to get the impression from this message board that tin foil hats are bad...
Did they get out of style or something?
I like mine.
Posted by: Eric Davis | Jan 10, 2008 3:56:10 PM
I double up all the time. Even triple down if the opp occurs.
Gives you some latitude if your first buy is wrong but you still like the idea.
Posted by: bucky katt | Jan 10, 2008 3:57:49 PM
MS: Thanks for the play by play.
This is a very dangerous market for anyone who understands the rot in the foundation of our economy. I can see the economy dropping right out from under the market, yet the market staying elevated for a long time. It will go down, but only after every trick in the book has been used. Down and dirty is the only way it will go down. It will have to be in tatters, when the Fed. has used all its ammo- and "don't fight the Fed" is again discreditted.
The whole ball of wax is in play now so don't expect this market to go quietly into the night. This market is no place for Bulls or Bears.
Posted by: zell | Jan 10, 2008 3:58:55 PM
MS
3,000,000 times 142 is not $840Million...it's only $426Million , but why quibble with numbers when you know it all ?
and there have only been 10 trades of 1,000,000 or more shares today , only one above 2.55 million ( that was 3,553,000 at 3:34)
and btw , I've managed 4 trading desks and now run a Long/Short fund for a hedgie ...I don't sit in the San Diego sun and take shots at everyone in the world all day , trading 1000 share lots with some discount broker
Posted by: BDG | Jan 10, 2008 4:01:53 PM
Yeah same here, ED, better to play it safe for now. Though, as MS (and BR, I think) mentions, this reeks of desperation. But, I echo it as well, this BS really pisses me off.
I'm really curious what the terms are going to be. But in any case, this changes very little, this is light years from a panacea.
Always a bright side, more short opportunities to come.
Thanks for your thoughts guys (MS, ED); really appreciate it.
Posted by: v | Jan 10, 2008 4:02:38 PM
Eric ,
at least you're a gentleman , I've never seen you take a swipe at anyone on this board .... and yes , your Hat fits very well
Posted by: BDG | Jan 10, 2008 4:09:04 PM
>>and btw , I've managed 4 trading desks and now run a Long/Short fund for a hedgie ...I don't sit in the San Diego sun and take shots at everyone in the world all day>>
Do you feel better now???
Oh and BTW I don't give a shit what you have DONE. And I certainly don't try to make myself feel better by touting my experience to others.
Good luck with that attitude......it's most likely the main reason that you've managed to work yourself out those jobs too. Because you could'nt come up with the numbers that were used to arrive at that amount tells me all I need to know about you and your "experience".
Ciao
MS
Posted by: michael schumacher | Jan 10, 2008 4:13:14 PM
It's obvious that for 20 years most of our economy has been propped up the Lie of low inflation. But the Charm of us realizing, like the Japanese, that that shell game stops when the rate hits 1%.
And the Economists throw up their hands and go... "how come it's not working!!!" and start pointing fingers.
What a continued embarrassment.
If Ben stayed Put, you know Washington, and wall street would have his ass. They are probably going to have his ass anyways.
and we have to learn the hard way.
Posted by: Eric Davis | Jan 10, 2008 4:14:13 PM
AMEX nearly half a billion dollar writedown...
Posted by: Stuart | Jan 10, 2008 4:16:46 PM
