Countrywide (CFC) has filed with the SEC that if its credit ratings are cut any further, its ability to raise money could be damaged. With the possibility of more write-downs of mortgage-based securities, it would seem likely that the big bank is in more trouble than some on Wall St. have imagined.
The Wall Street Journal writes that Countrywide said it believes it has "adequate funding liquidity," but that "the effect of future developments on the company may require us to … procure additional sources of financing."
This all reads like a lot of dancing around. Countrywide will face downgrades to its debt as similar pools of money are written down or sold off.
The firm is sending the minimum signal required by the SEC.
When the minimum signal reads that bad, it is time to get out.
Douglas A. McIntyre
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