So, Bank of America is buying Countrywide before it craters completely. Quite an end to what once was the biggest mortgage company in the country. They have 54,000 employees. Tens of thousands of them will probably be losing their jobs. And all the companies that serviced Countrywide will take huge hits too.
The Fed will drop interest rates more. It won’t help much. The problem isn’t so much the interest rates but that no one trusts each other much any more. Who knows what financial icebergs are lurking around the company who wants to borrow money from you.
The subprime mess is spreading to commercial real estate, credit card debt, auto loans and more. The loan itself wasn’t the important thing. It was the packaging and repackaging of debt into ever more bizarre packages, that’s where they made their big money. But all that’s gone kersplat now, like a bug against a windshield.
The stock market is wobbling now, the opening moments of a bear market. It will be growling loudly soon.