The late breaking news
out of New Century Financial, the third-largest subprime
lender, and Fremont General, the fifth largest, is staggering. An FDIC cease and desist
order at Fremont calling for it to cut back on subprime
lending. A criminal probe into securities trading at New Century. An SEC filing saying
that if New Century can't obtain waivers from its lenders, it could threaten the company's status as a going concern. Oh, and S&P also cut
New Century's counterparty
credit and debt ratings. Things are getting really ugly, really fast, just as I've been warning people to expect for months and months and months.