- Countrywide Financial Corp. Chief Executive Angelo Mozilo warned on Thursday that the U.S. housing downturn could lead the country into recession and the Federal Reserve should cut its discount rate to boost liquidity.
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."
- "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."
- In the interview, Mozilo also accused Merrill Lynch & Co. analyst Kenneth Bruce of "irresponsible behavior" in suggesting in an Aug. 15 research report that downgraded Countrywide to "sell" from "buy" and said that Countrywide might face a possible bankruptcy if market conditions worsen.
Mr. Mozilo didn't create any additional sympathy from me for him or Countrywide. Especially, since he was paid $69 million in 2006 and $160 million for a five year total. In addition, he has sold about $200 million of Countrywide stock in 2007.
While My Wealth Builder has no PR experience, I have a few ideas which I believe could create a more positive perception. So here are my PR suggestions, for what they are worth:
- Have a third party assessment of the issues. This would provide additional credibilty, which may help the case.
- Show more concern. One can do this without any admission of wrong doing. At least one can publically feel sorry for the folks losing their houses due to mortgage issues. During each interview, I would express concern for those who may be losing their homes.
- Contribute past and current compensation to solving issue. I call this as the Lee Iacocca solution, who only accepted $1 per year in compensation until the problems were solved at Chrysler. One could use compensation in the past five years to buy Countrywide stock. Also one could choose to accept no compensation until the problems are resolved.
For more on New Beginnings, check back every Sunday for the next segment.
Photo Credit: CNBC
This is not financial or public relations advice. Please consult a professional advisor.
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