# Biggest subprime casualty, New Century, goes bankrupt



## Lucky (3 April 2007)

I wonder whether this is a potential tipping point to trigger the R.E collapse in the US that has been talked about for so long...or is it just business as usual?


http://www.bloomberg.com/apps/news?pid=20601170&sid=a9e64Mkizp7I&refer=home 

_April 2 (Bloomberg) -- New Century Financial Corp., overwhelmed by rising defaults from borrowers with poor credit records, became the largest subprime mortgage lender ever to fail as it filed for bankruptcy today._


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## kyme (3 April 2007)

Bankruptcy in US seems to be different than here. All US airlines been bankrupt for years but still flying. US carmakers technically bankrupt but noone wants to know. US company going into bankruptcy often just for legal/financial advantage. Having said that US real estate market cactus, only question is how fast it will fall, followed by ours.


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## Gundini (3 April 2007)

kyme said:


> Bankruptcy in US seems to be different than here. All US airlines been bankrupt for years but still flying. US carmakers technically bankrupt but noone wants to know. US company going into bankruptcy often just for legal/financial advantage. Having said that US real estate market cactus, only question is how fast it will fall, followed by ours.




Yes agree, but you forgot to mention one, the US is technically bankrupt!


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## wayneL (3 April 2007)

...coming to a sub-prime lender near you! lol



Off topic (sorta)

But does anyone know why the letters "BK" are used to signify bankruptcy? Why not BR?

Have asked elsewhere and no one seems to know.

TIA


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## Kimosabi (3 April 2007)

Hello,

Problems, what problems?

I don't see any problems.

Property is safe as houses.

Property always goes up.

It never crashes.

Thankyou


Kimosabibots


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## Atomic5 (3 April 2007)

kyme said:


> Bankruptcy in US seems to be different than here. All US airlines been bankrupt for years but still flying. US carmakers technically bankrupt but noone wants to know. US company going into bankruptcy often just for legal/financial advantage. Having said that US real estate market cactus, only question is how fast it will fall, followed by ours.





Why is it said that our real estate market will follow the US's? It's structure isn't even remotely similar, and neither are it's problems.

In WA it is driven by the resources boom, WA being one gigantic quarry with few people and even less buildings. Why would that market follow the USA? 

They'll probably follow China's economy more likely....


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## constable (3 April 2007)

Now what's the name of a healthy listed caravan manufacturer in the states.......sounds like the trailer trash is going to need a home.


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## wayneL (3 April 2007)

Atomic5 said:


> Why is it said that our real estate market will follow the US's? It's structure isn't even remotely similar, and neither are it's problems.
> 
> In WA it is driven by the resources boom, WA being one gigantic quarry with few people and even less buildings. Why would that market follow the USA?
> 
> They'll probably follow China's economy more likely....




Because the RE market and the general consumer economy has become totally beholden to rapid growth in prices, loose credit and mortgage equity withdrawal.  Defaults and repossessions are hidden by the strong growth. As they were in the US.

Prices here are more overvalued than the states. When the music stops, the pain starts.


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## Kimosabi (3 April 2007)

wayneL said:


> Because the RE market and the general consumer economy has become totally beholden to rapid growth in prices, loose credit and mortgage equity withdrawal.  Defaults and repossessions are hidden by the strong growth. As they were in the US.
> 
> Prices here are more overvalued than the states. When the music stops, the pain starts.




hello,

is the bust actually here yet?

let me know the day it starts

goodluck

thankyou

 robosabibots


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## Atomic5 (3 April 2007)

wayneL said:


> Because the RE market and the general consumer economy has become totally beholden to rapid growth in prices, loose credit and mortgage equity withdrawal.  Defaults and repossessions are hidden by the strong growth. As they were in the US.
> 
> Prices here are more overvalued than the states. When the music stops, the pain starts.




Not sure 'bout that one dude. Have you ever tried to get a loan in Australia without having to tell the bank the colour of your underpants in a sworn statement?


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## Atomic5 (3 April 2007)

constable said:


> Now what's the name of a healthy listed caravan manufacturer in the states.......sounds like the trailer trash is going to need a home.




Looking for investment opportunities? wow that is low!


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## wayneL (3 April 2007)

Atomic5 said:


> Not sure 'bout that one dude. Have you ever tried to get a loan in Australia without having to tell the bank the colour of your underpants in a sworn statement?



Never heard of a lo-doc or no-doc loan? AKA liar's loan.

Rampant!


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## Kimosabi (3 April 2007)

wayneL said:


> Never heard of a lo-doc or no-doc loan? AKA liar's loan.
> 
> Rampant!




Do we have the equivilent of the ARM(Suicide Mortgages), Adjustible Rate Mortgage's in Australia?


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## wayneL (3 April 2007)

Kimosabi said:


> Do we have the equivilent of the ARM(Suicide Mortgages), Adjustible Rate Mortgage's in Australia?




Basically the same as a variable interest loan, with an initial fixed introductory rate for a set time. Just different terminology.

It's been common in Aus for quite a while.


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## Nifty (3 April 2007)

The lending parameters in the U.S. are way out of wack, this correction is just a steadier.My theory is that thinkers are ahead of the game,the sharemarket will continue to climb and the correction will not happen until the Democrats look like winning in 2008


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## Kimosabi (3 April 2007)

Nifty said:


> The lending parameters in the U.S. are way out of wack, this correction is just a steadier.My theory is that thinkers are ahead of the game,the sharemarket will continue to climb and the correction will not happen until the Democrats look like winning in 2008




Don't forget Labor getting in at the next Aussie Election...


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## wayneL (3 April 2007)

Nifty said:


> The lending parameters in the U.S. are way out of wack, this correction is just a steadier.My theory is that thinkers are ahead of the game,the sharemarket will continue to climb and the correction will not happen until the Democrats look like winning in 2008



The thinkers *are* ahead of the game. The problem is that not too many are thinking.

A lot of hope, little thinking.


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## numbercruncher (3 April 2007)

LOL Kimosabi your Robots impersonation literally had me in stitches ! Even more funny is that I have stitches on my Belly from day surgery today, so the stitches wasnt so good for my stitches so to speak!

Oh bless good old Robots


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## Freeballinginawetsuit (3 April 2007)

wayneL said:


> ...coming to a sub-prime lender near you! lol
> 
> 
> 
> ...




Possably because B/K are associated with Bank, whereas R is associated with ..........Ruptcy  .


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## Smurf1976 (4 April 2007)

Atomic5 said:


> Not sure 'bout that one dude. Have you ever tried to get a loan in Australia without having to tell the bank the colour of your underpants in a sworn statement?



I've been offered ridiculous amounts of debt without so much as proof of income or even having applied for a loan. It's like standing at the mouth of a river during a flood - more money being thrown around than you could ever productively invest.


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## Kimosabi (4 April 2007)

Smurf1976 said:


> I've been offered ridiculous amounts of debt without so much as proof of income or even having applied for a loan. It's like standing at the mouth of a river during a flood - more money being thrown around than you could ever productively invest.




or pay off... (That would be the kicker for the banks, in debt for life)


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## Kimosabi (4 April 2007)

Smurf1976 said:


> I've been offered ridiculous amounts of debt without so much as proof of income or even having applied for a loan. It's like standing at the mouth of a river during a flood - more money being thrown around than you could ever productively invest.




Even Cat's can get Credit Card now-a-days...



> *Credit card cat-astrophe*
> 
> AN Australian bank has blushingly admitted issuing a credit card to a cat. Messiah, a ginger tom, was given a credit limit of $4,200.
> 
> ...




http://www.news.com.au/dailytelegraph/story/0,22049,21010779-5006007,00.html


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