In an interview today Countrywide CEO Angelo Mozilo says that he thinks we are headed for a recession. This statement coming after the announcement of Bank of America deciding to invest 2 billion into the troubled mortgage giant. This will give Bank of America about a 16% stake in Countrywide Mortgage. Mozilo states that their sub prime exposure is in the upwards of 10% of the companies total mortgage holdings. Further explaining that he predicts that almost half of those loans will be refinanced out into fixed rates. Then why does he still think we are headed for a recession, not that he’s the only one. Not to mention that he has been dumping his stock lately which he says is totally unrelated. He claims he just wants to be doing it gradually so upon leaving in the future it is not a sudden action, but who really knows.

The problem I have with these extra efforts to bail out the mortgage industry is that it is beginning to look like the airline bailouts, but for consumers. This practice basically says its ok to go out and be reckless with credit because if enough people get in trouble, good old uncle sam will step in to bail us out. I saw an story on CNBC with a woman who was brought on for a debate saying that it is the responsibility of government to come in and help these people. This after previously admitting that when she gave her mortgage to the bank she didn’t bother to read any of the fine print herself! “It’s to confusing she argued”… are you kidding me! This is a grown woman on national television (claiming to be a professional) admitting that she doesn’t even read legal contracts she signs. It’s called being responsible, what is going on with this attitude in America?

See the CNBC interview here…