Volume 11 Blog

Saturday, September 08, 2007

No Evidence

See, it’s this level of stupid that’s just staggering right now as the houses of cards begin to tumble:

In recent weeks, Countrywide had announced 1,400 layoffs. Mozilo said Friday that those cuts were included in the 10,000 to 12,000 expected cuts among Countrywide’s more than 61,000 employees.

The company’s banking, insurance and loan servicing operations will see few reductions, with the bulk of the job cuts affecting loan officers, processors and other employees of divisions that generate loans, Mozilo said. Though Countrywide provided few additional details, Southern California will clearly suffer because the company employs about 15,000 people in Calabasas and elsewhere in the region.

“They’re a significant employer” in the West San Fernando Valley and Ventura County, said Nancy Sidhu, vice president and senior economist with the Los Angeles County Economic Development Corp. “The anxiety factor has to be rising for residents of the area.”

So far, however, her business advocacy organization does not see evidence of serious economic problems spreading beyond the housing sector, she said, an assessment shared by real estate and finance expert Stuart Gabriel of the UCLA Anderson School of Management.

No evidence of spreading beyond the housing sector? Come on over and I’ll make a bet with you right now. No, I won’t take your cash. Go buy some silver or gold and make your bet with that. That’s the only currency I will take.

If you’re currently attending or have considered attending the UCLA Anderson School of Management, I’d seriously find other options. That level of ineptitude is simply inexcusable in our current market conditions. Morons! This is like saying the sun isn’t in the sky during the daytime.

Let me say again, I and some friends have speculated as early as three to five years ago that the market corrections we’re beginning to witness would be starting this year, and we’re right on target. I guess we’re in the wrong line of work. But how do you put “prophet” on your resume and sell it successfully?

Posted by demo21 at 11:48 AM

Comments

Sunday 09/09/2007 at 04:13 PM

demo21 says

You know, Jason, I’ve assumed that many of the things we’re talking about are mistakes, too, but after reading something from Countrywide CEO Angelo Mozilo in a Business Week Magazine interview, I’m not so sure anymore.

What do you regret most about your business practices or not seeing this downturn earlier in the last six to eight months?

I reflect on this all the time. But by the way, nobody called and asked me these questions a year ago. Nobody called me and said: “Hey, look, there’s going to be a real problem here in subprime.” Knowing what I knew then, I don’t think I would have done anything much different. Knowing what I know now, obviously I’d do a lot of things differently.

But we didn’t know that values would be receding. We didn’t know that these markets would seize up. We didn’t know that there would be no liquidity in the global system. We didn’t know that Bear Stearns (BSC) and Lehman (LEH) and people of that quality were going to have major problems. We didn’t know that funds were going to collapse around the world. And we didn’t know that most of our competitors would go down, such as the New Centurys and NovaStars of the world. We didn’t know any of that. You can only deal with the information that you have at the time you’re making these decisions. And I had very different information then than I have now.

See, if guys like myself and friends and colleagues with whom I have spoken about this subject can foresee these things coming, why could these guys not see it? And I mean, clearly we saw it a LONG way out, not just a little as was mentioned in this interview.

I’m now of the belief that to consider what these guys (like Countrywide) have done as “stupid” or “naive” is actually naive on our part. I think they’re truly bigger scumbags than we would like to admit. Which is to say that they knew more than they’re leading on, but they would never want to admit that… because they would then have revealed how much they’ve purposely screwed many buyers.

We shall see. I think this could be a rough ride for them.

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