Will Buffett save Countrywide from a Possible Bankruptcy

Poor Poor Countrywide Financial. They've been under the gun for the last few weeks. After the fall of American Home Mortgage, there has been alot of focus on Countrywide from Wall Street. Things got really bad on August 15th when a Merrill Lynch analyst raised the prospect of a Countrywide bankruptcy in a research note.

During the boom times, Countrywide was known for their relatively lax lending practices. Their stock, once as high as, 45.26, closed at 19.81, Ausgust 20th, a slide of over 55% percent. Additionally, since the bankruptcy possibility was raised, Countrywide customers have started to pull out. Customers that attempted to withdraw their money over the phone were met with long wait times and a recording message about Countrywide being FDIC insured.

With all the negative speculation about a possible bankruptcy, Countrywide had some good news today. There is growing speculation that Warren Buffett, the billionaire investor, is interested in buying parts of Countrywide. This information has led to a rally in the Countrywide stock it's up 10% today. During the credit crunch, Buffett has been increasing his stack in companies vulnerable to the current uncertainly in the mortgage market. Buffett also told CNBC that the current problems in the credit markets were providing "real" investment opportunities.

At this point, Buffett buying parts of Countrywide is still just speculation. But for Buffett, taking a portion of Countrywide makes sense. He has the money. Countrywide is currently worth 12 billion dollars. Buffett on the other hand is currently worth 52 billion. Also, Buffett has built has career on assessing risk so taking a portion of Countrywide would fit with his past moves in the financial market.

Ki works with Escapeso Austin Real Estate. Their site provides a search for Downtown Austin Condos