More liquidity/default issues at New Century ... and a NEW round of global market turmoil

Things aren't looking good this morning at New Century Financial. All eyes have been focused on the subprime lender because it's one of the biggest mortgage companies to face serious problems related to surging delinquencies and foreclosures, early payment defaults, forced loan repurchases, and more. The latest news: In an early morning 8-K filing, New Century said its lenders believe the company is in default on its credit agreements. They're demanding the company accelerate the buyback of mortgage loans financed under those agreements. New Century says it doesn't have the money to meet the demand for accelerated repayment.

As for the broader market impact, the NEW news appears to be igniting another global you-know-what storm. Stock futures have reversed and started falling. The Japanese yen has started to rally. Bond prices have started to rise. We first saw these "reduce risk" trades emerge in late February. That was followed by an "Opposite Day" environment, one I said last Thursday that I was skeptical of. Now, traders are back to cutting risk. Talk about a roller coaster ride!