The Five Dumbest Things on Wall Street This Week

1. Motivated Seller

The roof is caving in at Countrywide (CFC Quote).

Shares in the Calabasas, Calif., lender sank 10% Tuesday after an earnings debacle. Profit plunged by a third in the second quarter, while defaults and delinquencies rose across the board.

Countrywide's outlook is even gloomier. The company slashed its 2007 guidance and warned of job cuts in coming months. CEO Angelo Mozilo said a turnaround is unlikely until at least 2009.

"We are experiencing home price depreciation almost like never before," he said on a marathon Tuesday afternoon conference call, "with the exception of the Great Depression."

There is much to be depressed about at Countrywide. Investors have been dumping the stock ever since the mortgage market started creaking this past winter.

Among the most enthusiastic sellers has been the 68-year-old Mozilo. He has sold 432,000 shares underlying options in the last month alone, according to Yahoo! Finance. Between July 11 and July 20, his pre-arranged stock sale plan allowed him to sell five times in seven days for a profit of $9.5 million.

All told, Mozilo has sold 3.8 million shares this year for a profit of more than $90 million. Meanwhile Countrywide has seen some $8 billion wiped off its market value.

"It is a personal situation," Mozilo said on Tuesday's call, "that I'm selling into a market no matter where the price of the stock is."

True to his word, Mozilo was selling just as much at $35 as he was at $40. And judging by his comments earlier this year, he's going to keep right on selling.

"I have created $25 billion in value for the shareholders," he told National Mortgage News back on March 12. "I gave them 98% of the value and took 2%. And [the shareholders] didn't have to do the work. I did it for them."

All this selling is doing a job on shareholders, all right.

Dumb-o-Meter score: 95. Poor Mozilo's option take last year was just $72 million.