Anatomy of a Countrywide Meltdown- literally!

The sounds of fury is getting louder. Here is how I see Countrywide (CFC) uJim nravel.

1. Mozilo was hoping for a FED cut along with his friend Jim Cramer. Now that appears to be a nothing but a fleeting hope. He appears again today April 2, 2007 to basically plead for three things: an interest rate cut, tax payer sponsored bail out plan for sub-prime, and investors to throw away common sense.

2. There appears to be small buy transaction of 2400 shares by three board members, one of whom is Ms. Brown, who abruptly resigned. This appears to be the ploy by the board members to shield themselves for possible SEC inquiry about insider selling.

3. Mozilo continues to sell his shares, especially on days that he appears on TV! Even as he tried to sell "snake oil" to the masses today on CNBC, he sold 46,000 more shares. But he states that he has every faith in Countrywide!

4. ALT-A was a whisper in the past few weeks. It is now growing louder with M&T bank signaling the first warning shot regarding this dangerous loan, which Mozilo tried to defend as "necessary" on CNBC.

5. Herb Greenberg, emboldened by the way the housing bubble is popping, goes on the offensive and CNBC is now getting more bearish.

6. Jim Cramer appears on Stop Trading! on CNBC and advises Mozilo to stop making TV appearances. In his blog, he also states that the stock is being killed faster by Mozilo appearing on CNBC and trying to save it. He is acknowledging that this stock will continue its death spiral. Yet, he continues to recommend this stock as a buy! Is he short? Cramer is the ultimate contrarian indicator. But even Cramer is losing patientce and faith in Mozilo.

7. In New Century (NEWC.PK) filing for Chapter 11 bankruptcy today April 2, 2007, it is revealed that many large national banks, including Countrywide (CFC) has large exposure of unpaid CDO's and loans purchased from New Century (NEWC.PK) which will ultimately continue to erode earnings, especially for Countrywide, which is not as diversified as say, Bank of America (BAC) or Wells Fargo (WFC).

8. Ever hawkish FED comments today continues to show that the FED is committed to fighting inflation, not saving housing market, which has gotten us into this debacle in the first place. Kudos to the FED for steadfast adherence to policy.

All we are waiting for is Countrywide's preannouncement of earnings shortfall, and further revenue guidance shortfall, as well as possible layoffs of tens and thousands of employees in an effort to downsize the company. I do not think a future SEC investigation or FBI investigation is too far fetched.