Bartiromo: What will determine whether this along with the $11.5 billion drawdown credit line, will in fact be enough?
Mozilo: Well, first of all let me comment couple things. One is the, just the irresponsible behavior on part of that analyst from Merrill Lynch to, yell fire in a very crowded theater in environment where you had panic already setting in the overall markets unrelated to Countrywide. Was totally irresponsible and baseless. And it, affected the lives of 61,000 people here at Countrywide our employees and more importantly or as important our deboss terse. Our deboss terse primarily senior citizens stood on-line frightened to death that countrywide would go bankrupt and lose their money. Has no basis whatsoever. Strong bank, well overcapitalized accessed to fed window.
Bartiromo: He had a buy rating.
Mozilo: Two weeks before had a buy, three weeks before had a buy rating on the stock goes from buy rating in two or three weeks to bankruptcy. Irresponsible. But we'll work our way through that. The company, at the, these things, doesn't kill you makes you stronger. We're much stronger company today than we certainly were couple weeks ago. So i think that, this is, we're going to have to continue to make sure we take every step possible within the mortgage bank, within capital markets area to make sure we are positioned for constantly changing environment. Because this environment is certainly not getting better at least today. Something tomorrow could turn it around. This is first step in series of steps we're going to take.
Bartiromo: Can you for investors watching who had access to that report can you categorically say we will avoid bankruptcy?
Mozilo: I can't can't, no company can scale they can avoid bankruptcy, can be guaranteed can't go bankrupt but I can tell you there is no more chance for bankruptcy today for countrywide than it was six months months ago, two years ago, when the stock was $45 a share. Which are a very solid company.
Bartiromo: How much direct contact have you had with the Fed?
Mozilo: I have had, only, direct contact with the New York Fed relative to our dealings with couple of New York banks. I have not had any contact with the Fed in Washington.
Bartiromo: It's curious that yesterday, you had four major banks going to the discount window. You had Citigroup, JPMorgan, Wachovia, Bank of America. So Bank of America comes out in the morning we'll go to the discount window. We took down $500 million. Then in the afternoon they say that they're going to invest $2 billion in Countrywide. Do you think maybe the Fed was, sort of having conversations with Bank of America somebody said look we can't let Countrywide struggle anymore?
Mozilo: I think they are totally unrelated but I do think Countrywide has more 10 million to make payments we driving force to have people own homes. I think fed watches that. But that was totally unrelated. Fed, I believe, I’m speculating when they announced reduction the interest rate through the discount window versus fed funds they expected banks to use that to create liquidity and they didn't. And there is stigma attached to using that window because you're paying more for it, why do it? The fed was trying to encourage the banks to use the fed window and I believe, was trying to demonstrate that there is no stigma attached to it when you have four major banks in the country do it. I think it was totally unrelated to Countrywide.
Bartiromo: I want to ask you about the fed's moves and about the liquidity environment today after all the injections of liquidity. Let me stay on the Bank of America story for a minute. People are looking at this, this a graceful way for Angelo Mozilo say good-bye and eventually sell this company. Is the ultimate plan to sell the company to Bank of America.
Mozilo: No, it's not. I think it is what we said it is. It is investment in part of the company. I think they see the company as great investment. If you look at the how they operate and what we do there is lot of symbiosis in balance sheet and operations. There may be things down the line they can for us better than we can do and vice versa. So I think there's a, strategic initiatives that could be developed overtime, but no, there is no even thought of Bank of America at least in my mind, Bank of America buying.
Bartiromo: Everybody knows or thinks that you spoken to b-of-a about taking over the company at much higher price.
Mozilo: That was, well, that was not true by the way. That story was never true.
Mozilo: The truth of that story was that there were thoughts at that time, that we could have some strategic initiatives together because of, we're the best in the world in the mortgage space. That's our focus. And they thought they could capitalize on that. Even at that time, it was a thought about, making investment in countrywide in order to, stimulate that those initiatives. There was never any discussions about them buying.
Bartiromo: Talk to us about the environment overall. You have this liquidity right now from b of a and the draw down that we talked about. Have you seen any change in liquidity? How tight is this credit crisis?
Mozilo: Speaking for countrywide there has been no change I believe in the marketplace there has been much change in liquidity despite the efforts of the fed. Unless the fed does some more, some more things. I think one to acknowledge there is a serious problem out there in housing which could spill into the overall market. And that the fed chairman is really looking at that concerned about it and paying attention to it and maybe, symbolically lower the rate to really demonstrate that there is a concern.
Bartiromo: Is Bernanke not getting the right information?
Mozilo: I don't know. I'm not inside the house there. So I don't know. I think they're working off of data. I think their tendency to work off data and data always tells you what happened and doesn't tell you what's happening. We know what's happening. So I think that's why you get these delayed reactions. I think from my perspective it's very serious issue going on in housing. Increased delinquency is. Increased foreclosures. No liquidity. Fannie Mae is capped. They can't participate to the level they should be participating at. Not because of leadership, fan it is a tick leadership because of the regulator who has got the on them. So we still have a tremendous liquidity problem. Some of the loans made in that 5-year period should not be made going forward I acknowledge that no question about it. But there are many loans should be made today, can't be made to legitimate buyers who need housing particularly in lower income and minority area we're not making. That is unfortunate.
Bartiromo: How long does this cycle take to work itself out?
Mozilo: I if knew that you and I would be interviewing in south of France not here in Calabasas. I don't know. It seems to me, I don't see a light here at the moment. Something could happen could change that overnight. Appears to me we've got a way to go to work our way through.
Bartiromo: How do you work your way through it? What needs to be done. You said you need caps to be lifted for Fannie and Fred dip. What else needs to be done?
Mozilo: Panic has to go away. Confidence has to return to the market. What is driving this is form it's not real. A lot of what is driving this lack of confidence, this panic. This is, one of the greatest panics I’ve seen in 55 years financial services. And, so something has to be done to restore the confidence the market. If we turn that around. Most of that was driven by form not substance. But form has become substance. Fear has become real. What you have a two handle on one year t-bill, the other day, that means, all the liquidity is going into it. Bills. That's how panic this market is.
Mozilo: We have to have some turn of events will put liquidity back into the mortgage space. Particularly at this time. We're originating best quality loans ten years at best prices in five years yet nobody wants to buy them.