Subprime mortgage lender New Century Financial Corp. said Friday it won't be able to file its 2006 annual report on time, and plans to request an extension from the Securities and Exchange Commission.
In early February, New Century announced it would restate financial results for the quarters ending March 31, June 30 and Sept. 30, 2006, to correct accounting errors for losses to too to buy back bad loans.
Three quarters of restatements -- that is not a good sign.
Then there's GM:
The cratering of the subprime mortgage industry could present more than just a pothole for General Motors Corp.
The world's largest auto maker disclosed Thursday that it will need more time to file its 2006 annual report with the Securities and Exchange Commission, marking the second year in a row the company has postponed the key filing.
Many analysts attribute this year's delay to a substantial hit the Detroit-based automaker might take from the exposure its part-owned finance unit -- GMAC Financial Services -- has to the business of making mortgage loans to people with weak credit or heavy debt burdens.
Just what Detroit needs right now -- financial headaches. The phrase "substantial hit" indicates analysts are pretty concerned about the situation.
4 comments:
If one of the world's largest industrial companies has to delay filing its annual report because of problems in a finance unit of which it is only a partial owner, then you KNOW there is a huge problem.
None of the subprimes seem to be filing 10k's.
And they won't even tell us why they aren't filing them. They keep saying they are going to tell us, but they never quite get around to it.
Cases in point NEW and FMT.
At least LEND gave a reason for its failure to file.
The fact that GM, formerly a manufacturing company, has come to be substantially dependent on finance for its profits is yet another sign of how far this country has fallen.
I blame the b-schools and the weenies they churn out.
And now their finance unit bites them in the butt while their manufacturing operation -- once a model for the world -- cranks out cars and trucks that nobody wants.
Analysts love to blame the unions for GM's problems.
Maybe the real problem is the fuel inefficient pieces of junk they've been churning out that nobody wants anymore.
Fortunately they have that finance unit doling out money to people who can't afford houses... oh, wait... that scheme didn't work either.
Maybe GM should go back to making really great, technologically innovative, environmentally sound cars.
It's a crazy scheme, I know, but give it a shot!
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