If Countrywide Financial Corp. (NYSE: CFC) can't borrow everything it needs to get back on its feet, perhaps people opening savings accounts at the mortgage bank will do the trick. According to The Wall Street Journal, Countrywide is pulling in deposits of $50 million a day. The paper writes the "company is counting on deposit growth to provide funding for its mortgage lending."
Because of the success of getting deposits from individuals, Countrywide will increase the number of branches where people can open savings accounts.
There is no doubting the troubles that the company has been through. It is in the process of cutting 12,000 jobs.
And, that's what does not make sense about the pace of new deposits. One would think that people would avoid putting money will a bank that has been in so much trouble and whose woes have been on the front page of every newspaper.
Either there is a sucker born every minute, or Countrywide is giving away very nice toasters for every new deposit.
Douglas A. McIntyre is a partner at 24/7 Wall St.
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Reader Comments (Page 1 of 1)
9-29-2007 @ 5:26PM
GIMPEL said...
"And, that's what does not make sense about the pace of new deposits. One would think that people would avoid putting money with a bank that has been in so much trouble and whose woes have been on the front page of every newspaper."
What's to worry about as long as their deposits are FDIC insured?
check out Gimpel's Galleries
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9-29-2007 @ 9:04PM
CrossProfit said...
GIMPEL,
With the Federal deficit approaching $9.8 trillion, who is the FDIC for the FDIC?
Just kidding…the FDIC should work if something goes wrong though it may take several months before people would actually get their money. In any case, CFC may be too big for the Federal government to allow it to collapse.
Food for thought, not an analysis.
Disclosure: Opinion of a CrossProfit analyst and may not reflect the opinion of CrossProfit.com. http://www.crossprofit.com
9-30-2007 @ 9:31PM
D Anderson said...
As long as depositors keep their deposits under $100,000 they will be fine (due to FDIC insurance).
Nothing wrong with showing support for the US Mortgage/Banking industry with deposits!!
9-30-2007 @ 9:36PM
douglas mcintyre said...
The common element with the UAW is not how the fund will be managed. This pension fund jointly administered by the UPS Board and the Teamsters.
The element in common is what it does to who hold the obligation and how much it saves UPS on its P&L
10-04-2007 @ 6:21PM
Nancy said...
I almost was almost one of those "suckers born every minute" because I was thinking about opening up a CD at their very competitive rate (highest in the country AFAIK) but I feel the same way about the FDIC as people did about FEMA after Katrina. I mean, I'm afraid of drowning before they get to me.