How low can Countrywide go?

Pretty low, it seems. Today's close was $5.12, down 6.4 percent from yesterday's awful showing. At one point it was trading as low as $4.65 (remember a year ago when it was trading at $45?). As noted earlier today, the mortgage lender reported discouraging delinquency and foreclosure numbers for December. Tom Atteberry, a money manager at First Pacific Advisors in L.A., told Bloomberg that the company is probably looking for more capital to shore up its credit ratings.

Investors controlling 134.4 million Countrywide shares were betting on a decline as of Dec. 31, according to data compiled by Bloomberg. The so-called short interest is about 4.7 times the company's average daily trading volume and about 23 percent of the company's shares available to the public. Credit-default swaps on Countrywide moved deeper into distressed levels for a second day. Sellers were demanding 30 percent upfront and 5 percent a year for contracts protecting Countrywide bondholders from default for five years, according to broker Phoenix Partners Group in New York. That compares with 28 percent upfront and 5 percent a year at the close of trading yesterday. A rising price indicates more skepticism about a company's ability to pay its debts.