Countrywide Financial Corporation (NYSE: CFC) is the United States #1 mortgage lender so it can get through this credit market crisis right? Possibly not. A huge amount of chatter around Wall Street today has been of Countrywide and its terrible liquidity problems. Just today the company was forced to borrow $11.5 billion from a group of 40 banks just to fund its loans. When a company makes a desparate move such as this just to stay afloat you have to wonder how much it has left. 
Earlier today, Moody's Corporation (NYSE: MCO), the major credit rating company, made a very important move to downgrade Countrywide's debt rating to the lowest investment-grade rating. This move is significant because it makes it that much more difficult and expensive for Countrywide to borrow money.
Also recently the Countrywide CEO has sold huge amounts of his own stock in Countrywide's stock. Some of the insider sales may be pre-planned, but there is certainly nothing coming from insiders which makes investors have any faith in the company. Why should an investor trust a company like Countrywide with their money when the insiders are selling continuously?
More and more major brokerage analysts on Wall Street are questioning CFC's ability to stay afloat given their current market position. Options traders are speculating that the company's stock could fall far more in the near future. The future for the United States' largest mortgage lender is very unclear, and that statement in itself tells you just how severe this credit crunch is.
» Wild day on Wall Street- What should you do? from GrowYourFunds
Today was one of the more crazy days one will ever see on Wall Street. The Dow was down 343 points at 1 pm, and then miraculously closed down only 15 points. The S&P 500 actually closed the day with... [Read More]
Tracked on: August 16, 2007 2:41 PM | Permalink to Trackback