Today's news from a leading investment advisor:
New Century Financial, the second largest lender in the subprime mortgage market, announced late yesterday that it will not be accepting any new loan applications. The company hopes the move is temporary but cautioned that it may not be. It can't accept any new applications and originate additional loans because New Century's creditors are closing the funding faucet rapidly and are essentially forcing the company to put a halt to its operations. Its stock is in the midst of a bloodbath at the stock exchanges as it has fallen 80% since the beginning of the month. Until a couple of weeks ago, the $1.3 trillion subprime market was considered to be the 'party of century' but things have soured extremely quickly. So where does the overall subprime market go from here and can New Century actually rebound?