I know during lean times like now others in our business have drained thier savings and even tapped into the equity of our own homes just to stay afloat. Now it seems that the mortgage companies have been in the same boat with us bailing out the water with our shoes as buckets.
Mortgage lender Countrywide Financial (Charts, Fortune 500), for example, announced Thursday that it needed to tap an $11.5 billion line of credit because of liquidity problems. That came a day after an analyst at Merrill Lynch suggested that Countrywide might need to declare bankruptcy.
In a statement, the Fed said that it took the move to "promote the restoration of orderly conditions in financial markets."
In another statement, the central bank indicated that "financial market conditions have deteriorated, and tighter credit conditions and increased uncertainty have the potential to restrain economic growth going forward."
The Fed added that "although recent data suggest that the economy has continued to expand at a moderate pace, the Federal Open Market Committee judges that the downside risks to growth have increased appreciably" and that the Fed was prepared to take more action if necessary.
Stock futures, which were initially trading lower Friday following another wild day Thursday, surged higher following the Fed's announcement.
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