They really said it ! [2]

One of the frequently sought after CEOs during the real estate bubble was Angelo Mozilo of Countrywide Financial. When one mortgage company after another started closing down, it became obvious that boom is turning into a bust.

But in their quarterly report announcement, Countrywide had the audacity to say the following.

The company also said it expects to be profitable in 2008.

'Countrywide's results for the third quarter of 2007 reflect the impact of unprecedented disruptions in the U.S. mortgage market and the global capital markets, as well as continued weakening in the housing market,' said Angelo Mozilo, the company's chairman and CEO.

He continued: 'However, during the period we also laid the foundation for a return to profitability in the fourth quarter. Countrywide has responded decisively and taken the steps we believe are necessary to address the current challenging market environment.'

What happened afterward was not a "return to profitability" by any stretch if imagination. This was not just an optimistic CEO. His front row seat at the then slowly unfolding drama of the mortgage crisis was also near the exit. As can be seen in reports like this, in the months preceding this announcement, he was unloading shares of his own company.

Countrywide Financial Corp. Chairman and CEO Angelo Mozilo cashed in $138 million in stock options over the last year, switching his trading plans as the mortgage company went into a tailspin, it was reported Saturday.
...
Mozilo unloaded 4.9 million Countrywide shares, most of which he bought through exercising options.
...
Mozilo adopted a new trading plan, added a second one and then revised it while the housing and mortgage industry slumped, the Times reported, citing regulatory findings. The changes allowed him to sell hundreds of thousands of additional shares before Countrywide stock plunged.

The report also mentioned the following, which is very much keeping in line with Enronisque business traditions that are no longer rare.

Calabasas-based Countrywide, the nation's largest mortgage lender in terms of volume, faces a lawsuit claiming it failed to warn employees about the depth of its financial troubles, resulting in heavy stock losses in their 401k retirement accounts.

The company recently said it will eliminate as many as 12,000 jobs in the coming months. Its stock, meanwhile, is off more than 50 percent from its $45.03 high on Feb. 2.

Angelo Mozilo is still not in jail. Could it because of so many of our honorable elected officials were parts of "Friends of Mozilo" program mentioned in this NY Times article ?

Senator Christopher J. Dodd of Connecticut, chairman of the Senate Banking Committee and a leader in the effort to help homeowners caught in the mortgage crisis, denied on Friday that he received preferential treatment for his two Countrywide loans.
...
But Portfolio.com, the Web site of the business magazine Portfolio, cited internal documents indicating that Countrywide had reduced the rate on the mortgage of Mr. Dodd’s Washington town house by three-eighths of a point, saving him $2,000 a year in interest payments, and reduced the rate on a Connecticut house by a quarter point, saving $17,000 over the life of the loan.
...
Portfolio.com reported that Alphonso Jackson, the former secretary of housing and urban development under President Bush; Donna E. Shalala, the secretary of health and human services under President Bill Clinton; and the former United Nations ambassador Richard C. Holbrooke also were part of the Countrywide V.I.P. program.

Just another case of the fox watching the hen house.