Wall Street Greek: Today's Key Market News - Countrywide, Always Tan and Happy Again

(Stocks in article: NYSE: BAC, NYSE: CFC, NYSE: IMH, NYSE: HD, NYSE: SFD, NASDAQ: WTSLA)

Stocks got a vote of confidence today, as Bank of America (NYSE: BAC) announced its investment of $2 billion in Countrywide Financial (NYSE: CFC). Yo Angelo! Congratulations bro! Countrywide CEO and founder, Angelo Mozilo, will be appearing at 11:00 a.m. on CNBC for an interview with Maria Bartiromo. As critical as we can sometimes be, we are generally good natured here at Wall Street Greek. We jest because we love, and because we're still waiting for the invite to the Palm Beach house Mozilo! Anybody that tan and happy has got to be okay, and probably pretty rich. We'll get an idea of how bad things were by the bronze factor of Angelo's tan this morning. After all, it is late August. If the CFC chief is a little faded, he probably spent some serious time stressing indoors over the past few weeks. Only the Greek's analysis gets that deep.

Equity futures are modestly higher, as in all seriousness, if BAC, a bank Warren Buffet owns interest in, feels comfortable with investing in the largest mortgage lender in the country, that's confidence building for the market. In other news, the Bank of Japan held rates steady and the yen fell. The carry-trade is back in fashion. Asian equities and European shares are higher today based on all this news, and some more ECB action to aid liquidity.

In U.S. news, Weekly Initial Unemployment Claims fell 2,000 from last week's level, to 322,000. Claims are running a little hotter than they were earlier in 2007, speaking from our own weekly reviews. In August, the mortgage industry has shed 25,000 jobs. We think it took so long for these jobs to go away because of the illusory paradise housing industry participants became accustomed to. When things go so well for so long, you start to believe they will always be that way. So, when you are the CEO of one of these firms, you suddenly get slapped in the face with the inability to unload loans, and you decide a day too late to consolidate your operations. That's a decent description of how we think the housing and mortgage industries have operated this year.

While we are looking for stocks to rally a little more here, led by tech and bargain stocks (read innocent victims of correction), we still expect the economy to slip into recession if the Fed does not act to support consumer spending and business investment. However, we do expect the Fed to cut rates by 50 basis points before too long. If not, we'll be looking to Congress to save us with pressure on Bernanke. We continue to expect new hiring, as reported in the Employment Situation Report, to weaken before layoffs increase. We are preparing a "Today's Coffee" article for you today to share our views in a more detailed manner.

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