IT IS GETTING CLOSER FOR COUNTRYWIDE

So now that we have the undivided attention of the main stream media, it begs the question, is the end near? What do I mean by this?

What I mean by that is, is the housing market near bottoming? There certainly is more noise surrounding the doom and gloom of the housing market and mortgage lending inustry. Perhaps we are near the end of the bear cycle for the housing market. But I do not think that it really is the end until the God Father of all things housing and mortgage finally pays the Piper.

No one gets out of this game unscathed. For too long, Countrywide was able to hide behind their perceived good name and a darn good public relation campaign. Their, mantra of "But, we are different from all others" might have worked for a while. But even that tune gets old as insurmountable evidence points towards the age old adage that "if it quaks like a duck, it is a duck".

Today was that pivotal day where everyone even remotely interested in this historical debacle taking form would agree that far more factual evidence came out lending credence that in fact, subprime issue is not just an isolated short lived case. Let's review what has come to light thus far in the world of housing and mortgage lending:
1. IMF acknowledges that subprime issue is not an isolated issue and appears to be spreading.
2. FED is seen publicly discouraging the public from being invested in Financial sector.
3. "Prime" lenders are being hit just as hard if not harder than subprime lenders, giving credence that ALT-A loans are indeed a force that needs to be reckoned with and the contagion is spreading from subprime lenders.
4. Home builders are continuing to come "clean" and asserting that this downfall will not be short lived and that much glut of supply exists confounding those who consistently are calling for a bottom.
5. Mortgage fraud is being defined and uncovered.
6. Unscrupulous broker practices are shown to be rampant and not in the best interest of the borrowers to use them.

What impact will this have on our economy?
1. Inflation continues to be the major concern and does not seem to abate.
2. Questions about stagflation is being tossed around at bloomberg TV.
3. Trade war with China has just started with severe consequences if this should escalate.
4. The tightening credit market IS a reality and everyone just needs to accept it.
5. The FED is more apt to raise rates in the future than cut it.
6. Despite Alcoa's earnings, media spin is once again causing undue optimism. Since when was Alcoa relevant?
7. Foreclosures and home loan defaults will trickle into consumer credit such as auto loans, consumer credit cards, and other financing activities.

I have a feeling that all of these cumulative weight of evience towards mortgage lending collapse will be more evident after the FED minutes tomorrow. Complacency has returned to the markets with false sense of hope based on no significant basis other than media hype has kept this market afloat. But this will have a severe short term consequences.

So we come to Countrywide, where they have been awfully quiet the past few days. Despite rising evidence to the contrary, Countrywide continues to remain a teflon to bad news. But the foundation is crumbling and once it crumbles, I anticipate that it will come down faster than New Century. This is a company that is rather opaque and has a lot of explaining to do. The similarities to Enron is unreal. Thus I can anticipate some form of warning from this company this week. If I am wrong, then I am wrong. But the alternative blood bath that this company faces if they announce a terrible earnings is too hard to fathom. Mozilo knows this. I think that it is this week where the truth will come out. If not, I am out of a lot of money, but undeterred, I will continue to short this stock. But the writing's on the wall for Countrywide.

1. abrupt departures of key insiders within relatively short period of time.
2. Questionable accounting principles.
3. More evidence pointing to CFC as one of the largest ALT-A originators and subprime exposure.
4. Incessant insider selling activity.
5. Damage control is priority for this company, instead of running a forthright company.
6. Lies Lies and More Lies.

So, I feel that this week is especially crucial for CFC shorts. I see ever increasing put volume that appears highly unusual. Hmm. Like say, AHM? When will they do the right thing?