Lenders
Considering that HSBC paid $14 billion to buy predatory lender Household International, and managed to lose more than they paid for Household, Countrywide still looks attractive to Bank of America. Although Countrywide lost $422 million it does not seem to change BofA’s proposed $4.1 billion takeover. In relative terms the price is good and may get better if share value drops even more. Nothing is certain these days, as evidenced by failed deals in recent months. Some of the failed deals were “brilliant ideas” which turned in to dim bulbs.
Mortgage problems have been plaguing Wells Fargo for months now. In late November the bank announced it would set aside $1.4 billion during the fourth quarter to cover to mortgage losses.
Wachovia said Tuesday its fourth-quarter earnings tumbled 98 percent due to a $1.7 billion reduction in the value of certain portfolios and $1.5 billion set aside to cover bad loans. Fourth-quarter net income fell to $51 million, or 3 cents per share, from $2.3 billion, or $1.20 per share, during the same period the previous year.