OK, prepare to be astounded with my ignorance. And please, if you are, enlighten me.

Marketwatch reported today that Countrywide reported that mortgage loan fundings for November 2007 were down 40% from November 2006.

The market has peeled off another 5% from CFC’s price today, though CFC’s been so volatile lately that it might be a little imaginative to call it a “reaction” to the news. It could be “reacting” to a butterfly landing on some institutional trader’s window and causing him for some reason to remember to unload another 100k of the shares. I don’t know.

Still, it’s interesting that this is being reported is that “CFC reports mortgage fundings down 40%”, as though this is the real news. But didn’t we already know that things are worse than last year? That’s not news any more. The news - the thing that is unexpected (or was to me) and of immediate interest - is that its total mortgage loan fundings were up 5 percent from the prior month. Why isn’t that the headline? When was the last month that CFC saw mortgage loan funding up from the prior month?

Again, I realize that there can be seasonal factors that make some months stronger than others, and so normally, comparing year-over-year makes more sense. But given that we’ve seen a massive dislocation and an ongoing effort to reprice mortgage risk, the huge year-over-year decline is already priced in. It seems to me.

Really, this isn’t about CFC, but about how financial reporting, and maybe most reporting, has to fit the current template. “CFC Mortgage funding up” doesn’t fit the “We’re all going to die because the 4% of the mortgage market in sub-prime loans is going to have above-average failure rates for a while” template. So the news, whatever it is, has to be reported in such a way that the template remains undisturbed (at least, that is, until the next template comes along).

Disclaimer: As you may have guessed, I am currently long CFC (though not in a big way).