The Real Shiz

CFC CountryWide Financial announced earnings and said that they think they can reach profitability again in the 4th quarter of 2007.  Apparently the overall market beleived them even though you have to question how do you go from losing $1.2 billion one quarter to profitability the next?  Where are their new home loans coming from?  From all of those houses that are selling?  Oh wait home sales have been in and continue to be in decline for over 6 months now with no signs of slowing.  Maybe they see a slight uptick down in the charred areas of San Diego but there is no real sustainable demand.

 Add to all this the fact that we may see a recession or at least a good sized slowdown and you have to ask yourself “can they really regain profitablity that fast?”  Assuming they do regain profitabitlity the next question is can they maintain it?  Unless they do some huge cost cutting and start financing houses in China they don’t have much of a prayer.