Southern California Real Estate Bubble Crash Blog

As many in Southern California know, a subprime (or non prime) implosion is underway.  Part of the ongoing “Spring Smackdown” coined by me, New Century is having a meltdown of historical proportions.  It seems only a few short weeks ago that we heard they were restating earnings and the company is doing fine.  Oh, it was just a few weeks ago?

CNN Money reports:

“We feel it is likely that New Century just used up its last option to avoid collapse, and believe a bankruptcy filing or liquidation may well be announced in the next week or two,” wrote JPMorgan analyst Andrew Wessel.

Merrill Lynch & Co. analyst Kenneth Bruce added that, while the financing might provide New Century a “temporary lifeline,” the REIT faces “likely liquidation in bankruptcy.”

Bruce and Wessel wrote that a bankruptcy filing “seems imminent.”

New Century is based in Irvine, although I also know of servicing jobs elsewhere in Orange County (Santa Ana for example).  If the company does file bankruptcy protection, there will be quite a few out-of-work employees.  I feel compassion for anyone who has found themselves working for an unscrupulous lender without having direct control over their future.  Many of them may have never known that any wrongdoing took place.  Unfortunately, those who profited from the recent obliteration of lending standards will likely not feel an ounce of pain that their intemperance will cause to a great number of families who will lose their home as a result.  We also have compassion on investors who believed what they wanted to believe; that it really was different this time.  They will learn the lesson by losing their money as well.

What goes up, must come down.

What do you get when your company says this about itself:

What about here?

Anyone who doesn’t know what happens to a local economy when a major employer goes bust… you’re about to find out.

At last count, NEW employed over 7,200 employees.  How many of them are in Orange County?

In CNN’s explosive interview with David Lereah (I’m being tongue in cheek), he and his mommy take aim at the David Lereah Watch Blog.

You’ve been accused by the blog David Lereah Watch of being too bullish. What’s it like to have an online antagonist? At first I was kind of laughing. And now, it’s enough already. This is a 26-year old that could not afford a townhouse and blamed it on the boom. And then he said, Who’s talking about the boom and my name kept coming up. So I became Satan to him.

The worst was that my mother read one of those things, and she almost started crying. And I had to say, Mom, you have to have thick skin. I’m going to be in the public and make statements about real estate, and if someone doesn’t like what I’m saying, they have every right to say something opposing me.

Now should they go so far as to call me Satan? I don’t understand where that’s coming from. That’s just weird.

To me, the only thing that’ s wierd is that he hasn’t taken on any of the other detractors… who have much worse to say, are more read, and more specific to his stupidity.  That he had to bring his mommy into the picture makes me wonder if he’s willing to fight his own battles.

Good thing Gary Watts’ mommy doesn’t read this blog, because it’s clear that he’s going to hell.  (I believe that lying to large numbers of people and taking advantage of them for personal gain will do that).

I have questioned wether Gary is an Ignorant optimist or a Deluded Sociopath. Perhaps other options exist, but I doubt they’re as nice.

That David Lereah is a baldface liar, or unbelievably incompetent is never questioned in the mainstream media.  That some 26 year old has to ask the question (and it attains national media attention) means that it has struck a nerve… David, you have finally made it… Congratulations.