Tuesday, July 24, 2012

(youtube audio clip) Angelo Mozilo's defense of Countrywide

For the uber financial nerd (UFN) out there -- there are dozens of interviews done by the Financial Crisis Inquiry Commission that can be found on Stanford's site (here).  There are plenty of interviews for UFNs: Buffett, Chanos, Einhorn and Burry.  Yet, I like to focus on one done by Angelo Mozilo today. For anyone who has followed Bank of America's turnaround, they know it's a pretty good business (large, stable, inexpensive deposit base) that is sitting on a toxic-clean-up-site called "Countrywide."

I thought it would be interesting to hear what Mozilo had to say since he was the former CEO and co-founder of the company. I wasn't let seems Mozilo had huge delusions of how great Countrywide was and/or he was really full of it.

In the interview he says...

1.) Countrywide's stock had a much better performance than Warren Buffett's Berkshire Hathway. (This is true'ish, if you don't consider it would have been a giant zero if Bank of America didn't buy it.)
2.) Boasted that Countrywide's creditors were payed in full. (Which wouldn't have been like if  it wasn't for Bank of America)
3.) Countrywide didn't take any TARP (Bank of America needed to...)
4.) Thinks it's unfair Countrywide is put int he same class of Bear Stearns, Lehman Brothers, AIG, Wachovia, Fannie Mae because these companies went under and Countrywide didn't. (Countrywide would have if it wasn't for Bank of America....)

Bank of America doesn't get enough credit for cleaning up the giant mess left behind by Countrywide.

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