Sub-prime lenders LEND, NFI,NEW were down again today, dropping between 3 and 17%. Wish I had shorted some of the sub-prime lenders instead of WCI!
I think this is just the tip of the iceberg, just like in the good old dot-bomb days when there was some initial weakening before the entire sector crashed. I think banks like HSBC will be negatively affected, more than they're willing to admit. I think even regular prime lenders will be affected too. CountryWide (CFC) is flat for the past 1 year as opposed to New Century, which is down 70%. I think CFC will eventually drop another 30-40%.
I closed out the rest of my inverse S&P500 trade (URPIX) for a small profit. I did work out as a good hedge against losses in my other stocks.
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