Thursday, Jul 19, 2007
The scary fact - this is from 1997.
NYTimes: Big Losses and Bad Accounting Leave 'Subprime' Lenders Reeling
DISPLAYING ABSTRACT - Subprime lending, risky business of extending credit to millions of Americans with tarnished credit ratings or none at all, is reeling from sudden rash of reports of crooked accounting, bankruptcy and unexpectedly high loan losses among several of industry's prominent players; turmoil is rooted in relentless growth in number of Americans with blemishes on their credit records, making the market far too large to ignore; with everyone, from biggest banks and giant credit companies piling in, competitive pressures have exposed cracks caused by ill-conceived growth strategies, poor management of operations and outright greed and has dampened Wall Street's ardor for their shares; financial problems at Mercury Finance Co, Search Capital Group Inc, TFC Enterprise, etc
1 Comment
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1. lvmreader said...
Auto Finance Industry Undergoes Tumultuous Period.(Originated from The Orange County Register, Calif.)
COPYRIGHT 1997 Knight-Ridder/Tribune Business News
Feb. 16--"Melrose Place" is having a slower year than the auto finance industry.
Since mid-January, some of the biggest publicly traded auto lenders have aired dirty laundry ranging from unexpected bankruptcy to top accountants going AWOL.
Imagewise, this isn't good.
And in the fledgling world of auto-loan stocks -- a sector that includes Irvine-based Consumer Portfolio Services, Western Financial Services and Onyx Acceptance Corp. -- image is a big part of the profit equation.
"It's a matter of confidence. And lack of confidence can translate into real financial problems, even for companies that aren't involved in the problems we're all reading about," said Bill Ryan, a stock analyst who tracks auto lenders for Smith Barney in New York.
In an industry based on making money from consumers who, generally speaking, have poor credit histories, investors might easily lose confidence based...