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Wednesday, February 07, 2007

Supercooled Lending

Ah, yes, everything that's old is NEW again. New Century (self-billed as a new type of blue-chip, aka a subprime lender) announced after the bell today that it would delay the filing of its fourth quarter financials, that it would not make a profit for the fourth quarter, and that it would have to restate its financials for 2006, which would result in lower reported profits. NEW also said that it expected its loan volume to drop 20% in 2007.

HSBC announced that it is setting aside an additional 1.76 billion in loan loss provisions.

I haven't included links in this because you should follow this and other housing stories on Calculated Risk. It's a superb economic blog with posts from very knowledgeable people in different industries, and it has a mix of perspectives and fact-filled posts and commentary that cannot be beaten.

I cannot overstress the importance of what is happening. The entire housing industry and related financing is now acting like supercooled water.


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