As we watched the Dow Jones opening bell on Bloomberg TV we also watched the Dow drop 100 points in the first two minutes of trading. Declines reflect little confidence in the debt markets. The Fed put more cash in to the system with $5 billion added overnight, but the move was overshadowed by one analyst who used the words “bankruptcy” and “Countrywide” in a recent report.
The analyst, based in San Francisco, wrote that Countrywide might have to resort to loan sales in the absence of funding from banks and bond investors. “If liquidations occur in a weak market, then it is possible for CFC to go bankrupt,” he wrote, using the stock symbol for the Calabasas, California-based company.