Friday was a weird day on Wall Street.

First, the head of troubled Countrywide Financial predicted that the ongoing credit slump would lead to a recession. He also said that things would be better if the Federal Reserve lowered interest rates (isn't that how we got into this situation in the first place?)

My guess is that the Fed will probably cut interest rates, not by the .50 percent rate that many economists are predicting, but by a quarter-point. The Fed is historically loath to cut rates because Wall Street tells it  to. It's also reluctant to cut rates too much because of inflationary fears (they don't want money to become too cheap). The Federal Reserve Board next meets on September 18.

But wait. Later on Friday the U.S. Commerce Department reports that sales of new U.S. homes unexpectedly rose 2.8 percent to an 870,000 annual sales pace in July, reversing two months of declines. Analysts were expecting new home sales to dip to an 820,000 sales pace. New home sales in June were revised to an annual rate of 846,000 from the previously reported 834,000 rate.

It's early, but that's potentially great news for the economy. The housing and lending sectors are bleeding badly right now, and any sign showing a turnaround could be a real shot in the arm for both industries, which right now are struggling with big financial losses, heavy layoffs, and a general crisis of confidence.

Let's see what happens, but for now, there could be a glimmer of hope on the horizon.