Hedging: How Important Is a 'Natural' Production Hedge? Very, for Countrywide.(Countrywide Credit Industries Inc.)(Brief Article)(Statistical Data Included)

Suppose you were the CEO of a company that had, since the biggest refinancing boom in history began last year, suffered some $4.4 billion in cumulative losses to your servicing portfolio.

Would you:

A.) Buy a disguise and quietly slip away to an offshore hiding place where you could assume a new identity?

B.) Hire the best civil and criminal defense attorneys money can buy in anticipation of shareholder lawsuits and an SEC investigation?

C.) Resign abruptly and blame the accounting snafus on your chief financial officer?

D.) Or casually mention the fact during a conference call with investors as if it were no big deal?

If you are Angelo Mozilo, chairman and CEO of Countrywide Credit Industries, you can afford to choose option D. Countrywide didn't let $4.4 billion worth of servicing hits, over $900 million of it in the second quarter alone, impair the company's financial results. In fact, Countrywide has prospered throughout the refi boom, consistently growing the size of its servicing portfolio.