Fed interest rate cut or no, providing loans for mom-and-pop types still will prove challenging, Goldstone says. He adds that people's difficulties in obtaining financing for credit cards and automobiles also may translate into bad news for the economy. "There is a constricting credit environment and it threatens to permeate a lot of different areas of the market," Goldstone says. A lot of real estate still needs to be liquidated at a time when home values are falling sharply, Goldstone adds. Santa Fe, N.M.-based Thornburg has seen the problems the credit market can cause first hand. The jumbo loan originator, which provides loans to homebuyers who need to borrow above the Fannie Mae ( FNM) cutoff line of $417,000, has had to scramble to raise cash to fund its loan business. The problem started when investors grew skittish about rising defaults on mortgage-related debt. Over the past few weeks, Thornburg has sold $20.5 billion of its safest investments in order to generate funds. The mortgage lender also raised cash by selling a $575 million stake in itself and borrowing funds against $1.44 billion of mortgage assets in order to finance its lending business. The lender has not been alone in its maneuvering. The largest U.S. mortgage lender, Countrywide Financial ( CFC), has had to seek funding assistance from Bank of America ( BAC) to keep itself afloat. Smaller players such as Impac ( IMH) and NovaStar ( NFI) have been cutting jobs, eliminating dividend payouts and generally trimming their sails.