Thursday, April 24, 2008

The Spin Is Getting Worse

From the AP:

Lewis [Bank of America's President] acknowledged the housing crisis wasn't over but said Bank of America paid a fair price for Countrywide and continues to perform deep due-diligence.

"There is a great long-term value embedded in Countrywide's business," he said.

But consider the following:

Mueller did not identify any of the companies under scrutiny. The Justice Department reportedly is looking into whether the nation's largest mortgage lender, Countrywide Financial Corp., misrepresented its financial position and the quality of its mortgage loans.

Congress is considering legislation to help half a million or more struggling homeowners get into lower-cost mortgages amid a darkening economic outlook that seems to be sinking into a recession.

Let's see -- the company you're buying is being investigated by the FBI for possible fraud, Congress is getting involved and the possibility of civil suits is incredibly high.

Does anyone have any idea as to why Bank of America is still considering this deal? I realize that what they are thinking is "when we get through all of the rough stuff, we'll own the largest percentage of he US mortgage market." But that assumes they'll get through the rough patch. Countrywide is beginning to look like the latest Enron.