How do you make money lending at 6% or 8% when your borrowing costs are 12.54%?

Ask the orange midget:

...dealers in the commercial paper market are currently quoting Countrywide Financial's 30-day commercial paper at a yield of 12.54%--this for a company that was borrowing in that same market at 15 basis points over the London
interbank rate, currently around 6%....

Back on Aug. 2, Countrywide said it has experienced no disruption in fiancing ongoing operations, inlcluding placement of commercial paper.

I'm starting to think bankruptcy is becoming pretty likely. If they can't use commercial paper, how do they get funding to make loans? Theoretically, they still have bank commitments, but that money is going to run out or the banks will find a way to cut them off. If S&P or Moody's wakes up and declares CFC no longer investment grade, that should be the death knell. Want to bet Mozilo is begging the rating agencies on a daily basis not to downgrade him?

UPDATE: or maybe not.

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