Countrywide Financial Bankruptcy Fears Cripple Stock

Countrywide Financial plunged over 13 pct yesterday, which is the biggest one day decline in this stock since the historic stock market crash on 1987.

This is yet another case of mortgage fears sending ripples through the business world and the global financial markets.

Analyst Kenneth Bruce of Merrill Lynch & Co. thinks insolvency is definitely on the cards for Countrywide Financial: “If enough financial pressure is placed on Countrywide or if the market loses confidence in its ability to function properly, then the model can break, leading to an effective insolvency. If liquidations occur in a weak market, then it is possible for Countrywide to go bankrupt.”

Analyst Sam Kirtley of The Gold Prices Newsletter agrees but says this is only the beginning: “We are witnessing the beginning of a massive real estate crash. This is not a slowdown, this is not a correction this is the beginning of a major crash. Countrywide Financial looks like its in trouble, its not the first as American Home Mortgage went bankrupt and Countrywide Financial will not be the last. We are urging our readers to invest in gold and gold stocks to protect their wealth and profit from this breakdown in the housing market.”

Countrywide Financial shares dropped $3.17 yesterday as Countrywide Financial closed at around $21.29. Countrywide Financial shares have fallen approximately 50% this year, meaning Countrywide Financial has lost over $6 billion in value as the market capitalization of Countrywide Financial is now $12.3 billion (6.2 billion pounds).

Do you think Countrywide Financial will go bankrupt?

Should investors sell their shares in Countrywide Financial?

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