The stock market's slump over the past few months has largely hinged on fears of a recession, buoyed by the subprime mortgage crisis and the housing slump. Bank of America recently announced it's plans to acquire the biggest symbol of the housing/mortgage debacle, Countrywide Financial.
The question is...will this be the "saving moment" of the housing slump? There have been small signs of encouragement lately, including some reports of increased building of new homes. Also, BoA's purchase of Countrywide actually prevents the FDIC from ordering a bailout of the troubled company. With Bank of America's large pockets saving Countrywide Financial, could we see a more stable mortgage industry?
Maybe so. These little signs here and there, plus a big acquisition such as this one, may mean that the worst could be over for the housing market downturn. Cautious optimism would be the best way to go when looking at this situation.
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