Will the Countrywide Financial deal close? Should it?

It's all very confusing. SRM Capital Management's Jonathan Wood has blasted Bank of America's (NYSE: BAC) deal to acquire Countrywide Financial (NYSE: CFC) as being grossly inadequate. Legg Mason Value Trust's legendary manager Bill Miller agrees.

And yet the stock isn't doing anything to suggest a better deal is coming. In fact, Wall Street has serious questions about whether the deal will close at all. With credit market worries showing few signs of subsiding, Countrywide shares are trading at discount of more than 20% to the value of the deal -- an unusually large arbitrage spread indicating that investors have their doubts about the deal's future.

Over on SeekingAlpha, Richard Shinnick wonders why Bank of America is doing this deal: "Why are you saving Countrywide? Why take this risk? You can build your own national mortgage network! In fact, you already have one! Why do you need this? What are you thinking?"

I agree, and also question the value of Countrywide's national mortgage network. The company has spent nearly 40 years building a strong network and brand, but you have to think that, financial woes aside, the hugely negative press attention has hurt the company's image. I would argue that the Countrywide name has such a negative connotation as to be worthless. As Warren Buffett has said, "It takes 20 years to build a reputation and 5 minutes to ruin it."