Although Countrywide Financial (NYSE: CFC) the bank, has gone on record as stating it is not in danger of going bankrupt and has plenty of liquidity to continue to operate and meet its current obligations, that could change. The bank is no doubt referring to the immediate future, like today or this week. Those who have expressed concern are thinking about next week, next month or six months out. I have no idea what the truth is, or if there are multiple truths, or if the company is dancing on the head of a pin.

• "Countrywide Home Loans is expected to service debt maturities beyond 2008 without additional debt issuance," the company said. Earlier Tuesday, a Countrywide representative told The Wall Street Journal that speculation the company may file for bankruptcy is 'absolutely false.'"

The company stock started off the year around $45 per share -- shares now trade around $9 per share. Here is a point that may be lost on the average investor: Even if there was no problem whatsoever with subprime mortgages and even if not one single mortgage holder was foreclosed on, Countrywide's business is down perhaps 80% and it is losing money -- profits are not to be found.

If people are not buying homes and condos and are not seeking traditional loans or any other kind, then Countrywide has to move fast to shrink its enterprise to match the customer demand level (which it has indeed been doing), and then start growing when the market picks up again. That means it has to be lean and mean, which means in turn that the company has to have the wherewithal to survive in a tough market for several years, not just this month.

While it is true many of Countrywide's competitors have been collapsing left and right, that may help them. It is also true that it is not in the best position to compete. Others are much stronger. Bank of America (NYSE: BAC), Wells Fargo Bank (NYSE: WFC), and JPMorgan Chase (NYSE: JPM), just to name a few, have superior size, balance sheets and top management.

The chairman and Chief Executive Officer Angelo R. Mozilo has been selling shares all year long. He has filed all the appropriate paperwork to give him "plausible deniability" regarding his continuous stock sales. But buyer beware, in addition to his planned sales, he has been selling his shares after each execution of stock options. These are not planned sales, except by him. If he thought this stock was going to recover anytime soon he would not sell so cheap.

If he sold a good portion of his shares last year at $30 to $45 a share and he believed in the company, he would be buying back shares now at "bargain basement" prices, but he has not. The company can issue positive statements all day long, but if the CEO is selling, should you be buying? We should be listening to their words, but looking at their actions.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm.