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To: Giordano Bruno who wrote (338950)	7/24/2007 3:48:29 PM
From: Broken_Clock	Respond to of 436258

14:36 Floor Talk: The market & Countrywide We noted earlier at 14:12 that the major averages were rolling over as the CFC conference call has progressed. This call has been going on for 2-1/2 hours now, and is becoming a major focus of market participants today... To recap, this morning everyone knew that CFC would report a terrible quarter, and the co delivered. However, while everyone expected some pretty tough comments from their press release regarding subprime, what immediately caught our eye was their comments on Prime loans: "Company incurred increased credit-related costs in the quarter, primarily related to its investments in prime home equity loans" (see 8:12 comment). This was new -- the serious issues facing subprime and Alt-A loans are well-known by now, but CFC to our knowledge was the first co to cite Prime loans as a new problem area. While this initially didn't receive too much attention, once the CFC call started, the co's comment that they are "seeing home price depreciation at levels not seen since the Great Depression" certainly made headlines, and spooked the market. So to paraphrase, even if all the issues facing subprime loans can be contained, CFC seems to be signalling that there's no relief in sight for the broader housing mkt, which could signal bigger risks for the economy... CFC's call is still ongoing, and it sounds as bearish as we've ever heard them. See our 14:21 comment for a summary of what they've said so far.... Dow -122, S&P -17, Naz -27.