Posted at 12:14 p.m., Wednesday, August 15, 2007
Countrywide Financial shares slip on analyst report
Advertiser Staff and News Services
Countrywide Financial Corp., the biggest U.S. mortgage lender, fell 13 percent, the most since the 1987 stock-market crash, after Merrill Lynch & Co. raised the possibility of bankruptcy, Bloomberg News reported. Countrywide operates several offices in Hawai'i.Bloomberg said Kenneth Bruce, a Merrill analyst in San Francisco, said in a research note today that "effective insolvency" would result if creditors force Countrywide to sell assets at depressed prices or investors lose confidence in its ability to raise cash, .
Shareholders shouldn't "understate the importance of liquidity," Bruce wrote. "If liquidations occur in a weak market, then it is possible for CFC to go bankrupt," said Bruce, who downgraded Countrywide to "sell" from "buy." The company trades under the ticker CFC.
