As we reported this morning, one time mortgage king New Century has tumbled all the way down into bankruptcy. It will now be up to the courts, the creditors and the management to see if they can put this shattered egg-shell of subprime loans back together again.
Some quick reactions from around the blogs:
DealBook writes that "For New Century, which billed itself as 'a new shade of blue chip'; whose executives grew rich as its stock soared; and where top sales people in the go-go years were treated to vacations in Europe and the Caribbean, the end came particularly fast and furious."
Market Beat comes with the broader market perspective: "The rest of the market isn’t going wild here, because this company’s fate has been all-but-assured for some time now. But the SPDRs Financial Sector ETF is down 0.9%, suggesting investors in financial stocks aren’t ignoring this news."
MarketBeat also quotes the guy who might be the official analyst of the day judging by how frequently his stuff is getting referenced, emailed and cited in light of new Century’s announcement. His name is Jeffrey Saut, and he’s very skeptical about the idea that problems in real state are not spilling over into the broader economy. Here’s an excerpt that made its way into the Big Picture’s“Quote of the Day”:
Similarly, “Why is Citigroup cutting 15,000 financial-related jobs?” And, “Why is GMAC stating that its Residential Capital subsidiary is going to hurt profits?” Inquiring minds want to know such things.
Moreover, if the problems in sub-prime mortgages are NOT spreading, why are sub-prime mortgage companies dropping like flies, why are companies like ACC Capital closing their “call centers,” and why are delinquencies rising not only in the Alt-A complex, but in prime portfolios as well?”