Huh Oh

Countrywide Mortgage is starting to have problems. Countrywide is the largest home lender in the U.S. As Bonddad says, if Countrywide can't get a deal done, no one can:

Countrywide couldn't sell $1 billion of loans at a decent price. They cut the value of these loans by 20% when they transferred those loans to their investment portfolio.

Countrywide couldn't sell $700 billion of prime loans, and devalued those by 14%.

That means the going price on both of these investments is probably lower than the devaluation on the balance sheet. Subprime loans are going for less than 80% of face value and prime loans are going for less than 14% of face value.

Simply put -- liquidity just isn't there in the market right now. And the crunch is getting worse because Countrywide couldn't sell prime loans.

Better be taking some Maalox if you have money invested in stocks. Is this another brief correction, or the start of something bigger? I think I hear government printing presses in the background ......