So right after the Bear Stearns funds blew up, I had a thought: This is what happens when you lend money to poor people.
Don’t get me wrong: I have nothing personally against the poor. To my knowledge, I have nothing personally to do with the poor at all. It’s not personal when a guy cuts your grass: that’s business. He does what you say, you pay him. But you don’t pay him in advance: That would be finance. And finance is one thing you should never engage in with the poor. (By poor, I mean anyone who the SEC wouldn’t allow to invest in my hedge fund.)
Also:
There’s a reason the rich aren’t getting richer as fast as they should: they keep getting tangled up with the poor. It’s unrealistic to say that Wall Street should cut itself off entirely from poor — or, if you will, “mainstream” — culture. As I say, I’ll still do business with the masses. But I’ll only engage in their finances if they can clump themselves together into a semblance of a rich person. I’ll still accept pension fund money, for example. (Nothing under $50 million, please.) And I’m willing to finance the purchase of entire companies staffed basically with poor people. I did deals with Milken, before they broke him. I own some Blackstone. (Hang tough, Steve!)
But never again will I go one-on-one again with poor people. They’re sharks.
UPDATE – FLY chimes in on his stance on the Poor: OY!
So, I understand 7 million people are going to lose their homes this year. Fuck ‘em. I’m sure they can go back to that one bedroom apartment in Brooklyn, effectively alleviating some of the traffic problems in the “well-to-do” area’s.
Look, everyone likes to talk about “the poor” like it’s some sort of problem. The only problem is their sub-par DNA, coupled with their inability to “bank coin” in stocks like RIMM, LNN or maybe even iiG (we’ll see tomorrow).
In short, being a former “poor person,” I can honestly say, from deep down, fuck the poor adults, but feed the kids.
After all, we shouldn’t punish the children because their parents are fucking hobo, Gov’t cheese eating losers.
Back in March, when the market first started panicking about the mortgage slump, Countrywide stock was still trading around $35. I wrote in this space about the fact that Mozilo and other insiders were shoveling stock out the door on an heroic scale. The CEO responded by going on TV to say that the mortgage turmoil was an “overreaction” that would “pass rather quickly” once people looked at the situation calmly.
He even went further, predicting that his company would benefit from the industry shakeout. “This will be great for Countrywide because at the end of the day all the irrational competitors will be gone,” he said. “A lot of our competitors are disappearing, virtually overnight.” As a result, he said, Countrywide was seeing “a flow of new business coming in. … At the end of the day, we’re going to be in an extremely dominant position.”
Comments like that did nothing to hurt the share price, which stayed above $35 right through the spring, and even into July.
During that period, Mozilo’s broker sold $95 million worth of his shares at an average price of $35.37, company filings show.
The investors who bought those shares have already lost $41 million.
How does Mozilo view the situation now? “I don’t see a light here at the moment,” he said last week.
My observation…What an old asshole. All the prick had to to in my opinion is stay off tv and keep his mouth shut or be honest on tv. Nope. Guilty in my book. That money should come back to shareholders.
Here is The Fly’s always entertaining angle…a mock letter to shareholders:
Angelo Mozilo, CEO of CountryWide Financial
This just in:
“Dear Shareholders,
As you know, I have been “dumping” stock on the open market, while handing out loans to OTB/Sub-Prime guy’s. Over the last few decades, my obsessive tanning routine has led to the baking of my brains and roasting of my balls, so my shrink says.
Proudly, I’ve managed this company with the same vigor and lending standards as the Italian Mafia, minus all the broken legs and collar bones. Needless to say, I am confident CFC will tan its way to a new all time high, after hitting new lows (my editor says that sentence is incoherent. I believe he is lying).
My main concern, naturally, is to tan my ass and face, until my DNA is altered to reflect my “tropical aura.”
Speaking of tropical, as the mortgage meltdown commences, I will be visiting the Island of Puerto Rico, where I will sip, profusely, many pina colada’s, while taking in some long overdue rays.
Finally, the point of this note is to tell you how cool my new tanning machine is, while informing you how “uncool” the mortgage’s are.
Wow – what a mess. It’s like an airplane urinal after a coast to coast flight.
Today, we got the first ‘give up’ an admission that a lender just can’t make it. I love their name – American Home Lenders (AHM). They sure lent. Like I always quote from Seinfeld – ‘You know how to maaaaake the loan, you just don’t know how to colllllect the loan.”
On Sunday it seemed obvious. I wrote:
For those homebuilder CEO’s that truly can’t manage their business, it’s over and they don’t realize it. I would be amazing to hear of a reorg or failure at this point. That would be something. I also meant the sub primers and banks .
Maybe in the next go around, the word ‘discipline’ will appear in lender’s names.
I hate financial companies. Licenses to print money and they still suck at running their businesses. Management should be shackled. Period.
The other shoe has finally dropped and the vulture funds are loving it.
The carcass of New Century (NEWC) is being picked at by the Investment Bankers that sold the original paper and the Hedge Funds specializing in Carcass paper. The Street has good coverage .
Mucho money will be made from this reorganization, just not the people holding the current stock.
New Century is a PLATFORM. That’s it. The derivatives that they created to scale and leverage…imploded.
As usual, shareholders that own the paper, do not know what they are holding. It is why I hate buying broken stocks.
That said ‘part 2′ – They are throwing the baby out with the bathwater on today’s news. Fremont (FMC) has access to capital and seems wrong to be down here. I will only buy real strength though at this point.
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