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I read a couple of interesting articles over the past few days. The first has to do with Countrywide’s continued problems with their loan portfolio. It talks about the impending purchase by Bank of America at what I assume is still near twice the stock value. Bank of America is overpaying for problems that have not even completely surfaced yet. Now I am no fool but why would you do that for any cost?

http://www.fool.com/investing/dividends-income/2008/03/14/countrywides-future-is-anyones-guess.aspx

A second article is talking about an announced buyout of Bear Stearns, who went in the tank (so to speak) late last week, by JP Morgan Chase. Unlike B of A deal, J P Morgan Chase is paying a small percentage of the stock value for Bear Stearns. As I recall the value paid is mainly for the value of the assets and no doubt some blue sky value. Now that makes sense to me. Take advantage of a good deal when it presents itself and get a real value in the process.

http://news.yahoo.com/s/ap/20080317/ap_on_bi_st_ma_re/wall_street

The first article talks about why B of A might still be in the deal and suggests it could just be for press, grandstanding etc. I have made no secret that I have a huge problem with the loan origination tactics of Bank of America. They sell you on the fact they have no closing costs and then charge you a high interest rate so they make their money “on the back side”. My opinion is that this is the purest form of deception and false advertising. A consumer may find this is a good choice but only after understanding all the options they have. I hope they get their deal done with Countrywide for the sake of the employees there but I will assure you if I have to put my money in my mattress they will be the last bank I will ever do business with.

Enjoy the articles and take a deep seat for the ride is really going to be interesting for awhile as the mortgage market and other markets continue to adjust to wherever all this is going to finally land.

More to come

Lonny