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
posted by The Phantom Republican @ 5:13 AM
1 comments
1 Comments:
This will hurt the national economy more than the pundits and "experts" contend. If we approach 1% growth GDP in July we are in recession, as President Bush would say' "big time."
A similiar thing happend with the saving and loan indutry in the early 1990's and the federal governement wisely rushed in to prop up the system. That lack of respond is sorely missing during this period in hitory. The feds have not acted at all and that will come back to bit all Americans. This administration has been weak of economics and thinks and behaves as if sectors of the economy can be compartmentalized from one another, impossible. Mix that with a possible slide in the Asian markets and 2008 through 2010 could be a long, hard dry spell for Americans. Christmas in 2007 America will be nothing to brag about!
Danny L. McDaniel
Lafayette, Indiana
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