January 9, 2008 (LPAC)--Countrywide Financial Corp., the actually bankrupt mortgage lender kept afloat by grabbing $50 billion from the Federal Home Loan Bank system in December, saw its stock fall 15% today, as foreclosures and late payments on mortgages hit the highest on record. On January 8 the stock tumbled 28%, the biggest drop since Black Monday in October 1987. Washington Mutual Inc., the biggest U.S. savings and loan, lost 13%; while IndyMac Bancorp Inc., the second-largest independent mortgage firm, fell  10.9%. Bank of America, which poured $2 billion into Countrywide in August, would face a loss of more than $1.3 billion, if it sold its stake in Countrywide's stock at the current price.

Foreclosures doubled to 1.44% of unpaid principal in December, to the highest level since it began tracking data in 2002; while delinquencies jumped to 7.2% of unpaid principal balance from 4.6% a year ago. December loan fundings fell 45% from a year earlier, to $23.55 billion. Ratings company Egan Jones, said Countrywide is in dire need of "an infusion of at least $4 billion within the next couple of weeks."

Since political decision is the only thing coloring this system with an appearance of solvency, lets unwind the mess while we still can. Firewall the banks, separate the speculation from the real, physical fact, that human families occupy those homes on which the actually worthless financial paper leans.