Time will tell if this is enough:
Bank of America Corp. threw home-loan colossus Countrywide Financial Corp. a $2-billion lifeline Wednesday in a vote of confidence that could stabilize the reeling mortgage company.
The deal came as cash-starved sub-prime mortgage lenders across Southern California announced more than 4,000 layoffs nationwide.
But we also have this:
It is a tale of two Wall Streets.
By immediate appearances, financial markets were getting back to normal yesterday. Stocks climbed, for the third time in four days. The nation’s four biggest banks responded favorably to the Federal Reserve’s efforts to inject cash into the financial system. Several big mergers were announced. And Bank of America invested $2 billion in ailing Countrywide Financial, the nation’s biggest mortgage lender.
Other news, however, showed just how much the ground has shifted in the nation’s financial markets — and the risks remaining that conditions could get worse. Lehman Brothers closed its home mortgage business. H&R Block, which has a mortgage unit, was unable to issue debt and had to take emergency loans. And a federal agency said that U.S. banks have increased their expectations for bad debt by 75 percent.
Investors should get used to the conflicting signs.
“The financial markets are in the middle of some tumultuous times,” said Tom Kersting, financial services analyst at Edward Jones. “It’s not surprising to me that you would see a mix of both bad and good news.”
