The Chairman posted a link to an article about a “bank run” on Countrywide Financial Corp. (CFC) . I just had to shake my head and laugh after reading that article. I’ve been watching that company, which happens to hold my mortgage, closely this year. Back in March when the subprime/credit concerns first got serious and just after New Century blew up, I posted this in my links section:

Mortgage Lenders Whistling Past the Sub-Prime Graveyard? — I just noticed this Countrywide (CFC) ad on my site. I wonder how much longer we’ll be seeing these.

Here’s the ad I was linking to:

It just seemed incredible to me that Countrywide, the biggest mortgage lender was apparently doing business as usual right after New Century went belly up. Then some weeks later I saw their CEO, Angelo Mozilo, co-hosting Squawk Box. He was all tanned (just off a nice vacation?) and kept talking about how everything was all good for the company despite what was going on in subprime land. I’m pretty sure he even talked about buying back stock (the stock is now about 05 lower). Well the real deal was revealed on July 24th when they released earnings. Here’s what Mr. Mozilo had to say:

“This is a huge battleship, and we’re headed in the wrong direction,” Chief Executive Angelo Mozilo said on an analyst conference call, referring to the housing environment.

He said it may be 2009 before the market recovers from oversupply, stagnant home prices, and increasingly lax lending standards that left many borrowers overstretched.

“Nobody saw this coming,” Mozilo, a 54-year mortgage industry veteran, said on the nearly three-hour call.

Nobody saw it coming? Really? I call bullsh*t. A lot of people called it in March if not earlier than that. Anyway, the death spiral in this stock has been simply amazing to watch. I just hope we don’t start seeing these bank runs spread to other financial institutions.

P.S. It’s interesting to go back and see/hear what was being said about Countywide earlier this year. This CBS News report from May 29th is an example: “Why is Countrywide Financial, one of the country’s largest subprime mortgage lenders, doing so well despite the recent lending crisis? Geoff Colvin reports.”