Wall Street owes Countrywide a big smooch. On the strength of disappointing job report numbers from the Bureau of Labor Statistics Friday morning, the Dow Jones industrial average fell 250 points. Just imagine the carnage if Countrywide had let slip the news that it was about to ax 12,000 more jobs before the close of trading. At least now traders will have all weekend to get their heart rates under control.

The Wall Street Journal's James Hagerty has the scoop:

Countrywide Financial Corp. is expected to announce plans to reduce its work force over the next three months by 10,000 to 12,000 jobs, representing as much as 20 percent of the current total.

The largest U.S. home-mortgage lender also expects that its loan originations in 2008 will be about 25 percent lower than this year.

The news from Countrywide is a very big deal. As goes Countrywide, so may go the country. Countrywide is a significant financial institution -- if it's in trouble, chances are that the banks it does business with are going to get burned also. Certainly, financial markets that are already jittery in the extreme will be even more prone to fits of hyperactive volatility.

The news is also an opportunity for almost unlimited schadenfreude. It wasn't that long ago that Angelo Mozilo, CEO of the biggest mortgage lender in the country, and a pioneer of some of the innovative mortgage products that have proven to be so toxic, was patting his own back about how smart Countrywide had been in a sea of stupid and irresponsible competitors.

As reported by the Los Angeles Times:

[Mozilo] assured his audience that Countrywide's "proprietary technology" would help it meet its goal "to avoid any foreclosure." Countrywide invariably kept to "prudent underwriting guidelines," he said, to ensure that its adjustable-rate borrowers could handle the highest interest rates that might kick in during the life of their mortgage.

"This is when we shine," he said, calling Calabasas-based Countrywide "an industry leader" and "a role model to others in terms of responsible lending."

Even more recently, Mozilo was boasting how the ongoing shakeout would allow Countrywide to consolidate and extend its dominance of the industry. In March, he told CNBC that "This will be great for Countrywide at the end of the day because all the irrational competitors will be gone."

Well, one thing's for sure: No matter what happens, things will be great for Mozilo, who has cashed out some $425 million in stock options over the past three years. I'm sure that will come as delightful comfort to the 12,000 Countrywide employees about to hit the street.

Let's just hope that they aren't waiting for their adjustable rate mortgages to reset.