subprime-related headlines everywhere ...
* Bernanke is getting rapped hard right now by a couple of members of Congress for the fact the Fed didn't do enough to regulate/control the mortgage lending market before it got completely out of control.
* CIT Group, an independent commercial finance company said it lost $127 million, or 70 cents a share, in the second quarter. The problem? CIT is a big subprime lender. It booked a large $495 million loss related to the write-down of $10.6 billion in home loan receivables. An analyst cited in the Bloomberg story notes that it's about a 7% haircut on the value of those assets. The company said it will quit the subprime lending business entirely, following a recent move by GE to dump its WMC mortgage business.
* The price of buying credit default swaps on bond insurance firms, such as MBIA and AMBAC Financial Group, is going up. The fear is that these guys have guaranteed the repayment of bonds backed by consumer loans and collateralized debt obligations, and if more of those bonds sour, it could cause earnings problems for the insurers.
Wild, wild times.