Bill Wexler's Trading Cabana Message Board

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Non-Tech : Bill Wexler's Trading Cabana

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To: Bill Wexler who wrote (1752)	3/15/2007 4:40:42 PM
From: RockyBalboa	Read Replies (3) of 6370

NDE Indymac; while we see some relief buying at the subprime and alta front, NDE's fundamentals continue to deteriorate. NDE did the bulk of its production in Q3 Q4 2006 outgrowing the competition. Now... some statistical analysis show that NDE increasingly crowded out other lenders like: EMC, WMC, Wells Fargo, GMAC/RFC, as we approached Q4, 2006. The trends in credit quality worsened increadingly into Q4 while the price dynamics in underlying houses have been flattening if they did not decline outright. These are the core assumptions why NDEs loan portfolio in the alta segment will fare WORSE than the books of their direct competitors. NDE has many new loans whose problem loans will show up in a few months. NDE loaned the money for underlying values which then only declined. NDE loaned when the competition already began cutting back. NDE might have the worse risks, defaults not priced in and untested property prices underlying the loans. What's more: NDE was able to show significant growth in Q3 and Q4 while others did not. Those numbers can and will tail off when the Q1 report is due. It is not a pretty picture and NDE is prone to lose 50%.

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