Countrywide CEO sees recession ahead
Thursday August 23, 12:45 pm ET
NEW YORK (Reuters) - Countrywide Financial Corp (NYSE:CFC - News) Chief Executive Angelo Mozilo warned on Thursday that the housing downturn is likely to lead the country into recession, but called speculation that the largest U.S. mortgage lender might go bankrupt "irresponsible and baseless."
In an interview on CNBC television, Mozilo also said he is not contemplating selling Countrywide to Bank of America Corp (NYSE:BAC - News). The second-largest U.S. bank on Wednesday invested $2 billion in Countrywide, helping to shore up the latter's finances.
Asked if there would be a recession, Mozilo said: "I think so ... I know I've been proven wrong so far, but I can't believe that when you're having a level of delinquencies, foreclosures -- equity has disappeared, equity is gone, the tide has gone out -- that this doesn't have a material effect, A, on the psyches of the American people, and eventually on their wallet."
Mozilo, 68, said markets are in "one of the greatest panics I've ever seen in 55 years in financial services."
In the interview, Mozilo also accused Merrill Lynch & Co. analyst Kenneth Bruce of "irresponsible behavior" in suggesting in an August 15 research report that Countrywide might face a possible bankruptcy if market conditions worsen.
"There is no more chance for bankruptcy today for Countrywide than there was six months ago, a year ago, two years ago, and when the stock was $45 a share," Mozilo said. "We're a very solid company."
Merrill Lynch spokeswoman Carrie Gray declined to comment and said Bruce was not granting interviews.
As to a Bank of America takeover, he said: "There's no, even thought, of Bank of America, at least in my mind, Bank of America buying."
Countrywide shares fell about 1 percent while Mozilo spoke. In early afternoon trading, they were up 97 cents at $22.79 on the New York Stock Exchange.
(Reporting by Jonathan Stempel; Additional reporting by Joseph A. Giannone and Dan Wilchins)
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