Chuck Ponzi March 13th, 2007

I have said before that the bubble won’t have gotten steam until we have a perp walk.

We may just have our first one.

Yahoo Finance tells us:

Subprime mortgage lender New Century Financial Corp.’s problems deepened Tuesday as the New York Stock Exchange took steps to delist its shares and the company disclosed a federal prosecutor in California is conducting a criminal investigation into its accounting errors and trading in its securities.

As if the preceding 3 weeks for the company hasn’t been serious, this is most definitely one of the most serious announcements about the company to date.

Last month, New Century said it lost track of how frequently these borrowers missed payments on their mortgages. Because New Century’s books didn’t reflect how often borrowers defaulted and how likely borrowers were to default in the future, the value of the company’s loan portfolio was overstated.

I hardly think that New Century was alone in the Subprime business on how it conducted itself.  Instead of one large company that folds like Enron, this is like a lot of little Enrons that will likely occupy the national conciousness over the next few years.

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