Sub Prime Casulties

[Groty]

Tom Brown down 18% year to date.

http://www.nypost.com/seven/03082007/bus..._roddy_boyd.htm

David Einhorn resigned as a director of NEW.

http://www.marketwatch.com/news/story/gr...o&dist=yhoo

[ahnuld]

Alot of the subprime lenders are getting their assess to capital cut off and arent taking any new applications. Anyone know the implications from this in the normal lending market? Higher interest rates?

[Groty]

10 days ago Tom Brown said it was time to be greedy. LEND down another 20% since then. He must be salivating.

http://bankstocks.com/article.asp?type=1&id=9881304

[jaydub]

ahnuld,

Alt-A's are next. Basically 95% LTV, full doc, 600ish ficos are now required for the "subprime" loans (which don't really have a proper definiton). I expect we move well beyond this before it is all done.

And yes rates are way up for risky loans. Down for prime though I believe.

J

[SMB]

Spreads on credit default swaps for the ABX Indices (which are essentially an index of subprime mortgage-backed bond issues) have dramatically widened over the last several months. 2006 issues are trading around 1700bps, which means it'll cost $17 per $100 insured. That's incredible.

[eastbay]

[ QUOTE ]
10 days ago Tom Brown said it was time to be greedy. LEND down another 20% since then. He must be salivating.

http://bankstocks.com/article.asp?type=1&id=9881304

[/ QUOTE ]

I think that saliva has now turned to vomit. LEND down 21% today so far.

eastbay

[AvivaSimplex]

And down another 50% today after announcing it got hit by margin calls.

I believe Tom Brown when he argues LEND is best-of-breed. So if LEND is getting whacked, everything else is likely also heading for bankruptcy.

[Groty]

Yep. Doug Kass said a few days ago there's a real possibility none of the pure sub-prime lenders will survive. The market seems to be validating his opinion.

[r3vbr]

http://money.cnn.com/quote/quote.htm...D&time=all

LEND is down 70% today (biggest one day stock decline i've ever seen) putting it at a P/E of 1.55

Will this company definately go bankrupt? Im sure that over the next few months this stock will definately be undervalued if it already isnt. Too bad I dont understand how to value highly leveraged companies, the RoR aspect makes it tricky.

[James282]

LEND is a great company, but it certainly doesnt help that they have several billion in debt that they hope to pay off with loans that are increasing in deliquency % at an alarming rate.

James, who is happy he sold lend at 32.