Thursday, March 15, 2007

It Will All Hit The Fan in 2007, Part 14

It's 2007, and it's starting to hit the fan. Exotic mortgage products invented in the past 6 years are coming back to bite the companies that depended on them. These "easy money" mortgages have been the driver behind the real estate boom of the past 6 years.

As expected, the fan-hitting is affecting the weakest area of our financial system first – sub-prime mortgages.

The following stock charts tell the story better than I can. These are all players in the sub-prime mortgage market:

New Century Financial is expected to go bankrupt. Its stock is currently at $1.66. It was $30 in February.



Here are 3 more companies that specialize in the sub-prime market:







Are these price drops over-reactions? Probably.

Will the stocks bounce? Probably.

But these charts are clearly indicating that something is definitely wrong in FinanceLand.


Links to previous "It Will All Hit The Fan in 2007" posts:
Part 1, Part 2, Part 3, Part 4, Part 4 (Addendum),
Part 5, Part 6, Part 7, Part 8, Part 9, Part 10, Part 11, Part 13

Original link to this post:
http://thephantomrepublican.blogspot.com/2007/03/it-will-all-hit-fan-in-2007-part-14.html