On the heels of the Bank of America announcement that they are going to acquire Countrywide, there is a flurry of announcements and transactions. Ocwen Financial announced today that a group led by their CEO is seeking to take the company private. Citi announced staggering subprime writedowns and is raising 12.5B in additional capital. Merrill Lynch is raising 6.6B in convertible preferred stock to help stem their liquidity issues. Indy Mac which is trying to survive the mortgage meltdown announced today that it is going to shed 24% of its workforce to bring the company to profitability. First American is spinning off its title and specialty insurance business. If there was not enough fuel for the fire, this week will feature 4th quarter earnings announcements for Wells Fargo, Chase, Merrill Lynch and Washington Mutual. There are rumors flying through the mortgage industry on around National City and Washington Mutual-none are confirmed.
The feeding frenzy across the financial services sector is at a new height. There are bargains abound for mortgage assets and venture capital funds, hedge funds, governments and private equity funds are eagerly seeking to take advantage of the US mortgage meltdown. US recession talk is a reality and December housing numbers will be released on Thursday are not likely to be helpful. We are off an extremely active 2008 and look for major announcements within the Top 30 mortgage lenders over the next sixty days. The survivors of the first quarter will be the net winners of the meltdown.
MarketWise Advisors, LLC
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