Countrywide CEO Takes the Punch Bowl Away

Credit-crunch metrics were still distressing on Thursday as a Federal Reserve report showed commercial paper outstanding declined for a second week in a row. The drop suggests many companies have been forced to make orderly exits from the commercial paper market, writes Tony Crescenzi, chief fixed-income strategist at Miller Tabak and RealMoney.com contributor. That will force companies to find funding elsewhere, and it won't be available to all, he notes.

Furthermore, the creep into corporate creditworthiness may soon start to show up in defaults, Moody's noted. The ratings agency said some companies with speculative-grade, or junk, credit ratings "continued to show signs of strain in July."

The agency has identified 71 issuers facing potential liquidity issues; of those, 20 "have weak liquidity, meaning they are reliant on highly uncertain sources of external financing," says Moody's. The other 51 rely on lines of credit from banks, which may not be there if they trip over covenants that would give lenders an out.

Mozilo has been shut out. The message from the banks Countrywide typically borrows from has been, 'We've got our own problems,' said Mozilo in the CNBC interview.

The mortgage executive had no kind words for the Fed either, saying the central bank has done nothing to help Countrywide with its liquidity problems. The Fed's discount rate cut, which brought down the rate charged to depositary institutions that borrow at the Fed's discount window, is useless to Countrywide because it cannot borrow there for regulatory reasons.