Struggling Countrywide won’t be closing up shop anytime soon — the country’s biggest mortgage lender says it has lined up another $12 billion in financing to help it stay afloat. That cheered CFC investors, who pushed the stock up 10% this morning, and will may also buoy those who say that the mortgage crisis won’t spread to the online ad market. Countrywide, remember, increased its online ad spend in August.
But pessimists like us will focus on the rest of the news Countrywide announced this morning: “The company also said it had funded $34.4 billion of mortgage loans in August, the fewest this year and down 17.3 per cent from a year earlier, as it lost access to capital and tightened lending standards.” Again, the risk is two-fold: That Countrywide and other mortgage shops pull back on ad spending as their volume slows, and that housing/mortgage problems will hurt the broader economy, which will reduce ad buys in general. We have yet to see the former problem materialise, but the second one showed up this week, when TNS announced that ad spending declined for two consecutive quarters — the first time we’ve seen that since 2001. Reuters