Sunday, August 19, 2007

Countrywide's Rocky Ride

With rumors flying about the instability of Countrywide Financial, the week ended on a somewhat better note as the Federal Reserve cut the discount rate by 1/2% and Countrywide borrowed $11.5 billion in bank credit lines to secure short term liquidity concerns. The moves triggered a rise in the Dow of 233 points on Friday, including a 13% rise in Countrywide's stock and an upgrade from "sell" to "neutral" . Still, Countrywide's stock is down 50% for the year, and they face the possibility of several cost cutting measures. In addition, the future of Countrywide's subprime lending unit, Full Spectrum, remains uncertain.

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