3 replies to this topic

[relax]

Will this have any impact on trading Monday? or will the illusion continue? American Home Mortgage cuts profit forecast Warning suggests subprime woes are spreading to other home loans American Home Mortgage Investment Corp. cut its first-quarter and full-year profit forecast by more than 25% Friday after being hit by problems in the secondary market for home loans and mortgage-backed securities. The company also said that it's stopped offering some types of so-called Alt-A mortgages because of the high cost of delinquencies on those loans. The warning suggests that problems in the subprime-mortgage business have begun spreading to other parts of the home-loan industry. American Home said that first-quarter earnings will be roughly 40 cents to 60 cents a share, down from its previous view of $1.11 to $1.17 a share. For 2007, it forecast earnings of $3.75 to $4.25 a share, compared with the $5.40 to $5.70 a share it previously predicted. The company also announced that it is cutting its quarterly dividend to 70 cents from its previous level of $1.12 a share. "During March, conditions in the secondary-mortgage and mortgage-securities markets changed sharply," said Michael Strauss, American Home's chief executive, in a statement. "While the market may recover ... our working assumption must be that current market conditions will persist."

[skott]

I Wall Street is adopting along with much of America the Oprah "Secret" and that is, positive thinking or the Wealth Attraction principle will see us thru everything. Just see yourself as being rich and you will be. Just see a prosperous America despite foreclosures, bad loans etc and it will be prosperous. The Emporer has no clothes!

[arbman]

It is amazing with all this negativity in the mortgage market, the dollar isn't still bouncing fast enough. I mean what is going on? I think Fed must be thinking about the same thing; how come they ended up injecting faster than the mortgage market managed to destroy the dollars and not surprisingly, there is a high inflation?!? There is a reason the Fed says the inflation will come down, they must know the problems with this mortgage market, yet it still didn't support the USD. I believe there is an intentional decision made by the Fed to pressure the housing to squeeze the speculators. The gov't and the big brokers are all about killing the small speculators, I suppose!

[LeroyB3]

The market will tell you if it matters or not. Best, LB