[TampaFla]

Ok, maybe I at least understand this part?? Countrywide has a lot (???) of assets (mortgages) that may be worthless, i.e., a $500,000 mortage on a $300,000 house, that can't be sold at any price (now anyway), is worth ???
Countrywide can not borrow directly from the Fed (ineligible). The Fed loans money to Bank of America at 5.75%. BoA buys non-voting "preferred 7.5% stock" in Countrywide with an option to buy voting stock at a 20 percent discount over the current market price. BoA waits to see whether or not Countrywide can be saved by the Fed pumping money out (or lowering the interest rate to regenerate the housing bubble. Either way, BoA is the beneficiary of the Fed's discount. If Countrywide's assets somehow balloon again BoA buys Countrywide with the options it acquired (using the cheap Fed money). If Countrywide's assets decline, BoA still gets (maybe) to collect a bonus on the cheap Fed money.