With Bernanke and the Fed’s rate cut, it seems the credit crunch may be easing for some of us. The fall out in the subprime industry will be interesting. This past week, ETrade made news by exiting the mortgage market. Countrywide has already left the subprime market. This will leave big players, like Wells Fargo (WFC) as one of the ‘titans of the industry’. Subprime doesn’t have to be a financial sinkhole for companies, especially if it’s done right (e.g. with documentation). Obviously, the firms wouldn’t get involved if they didn’t think they could turn a profit. Wachovia and their Golden West acquisition is another mortgage player going forward. While everyone is running from the mortgage industry right now, the consolidation will only help those left standing.
