Pond Scum vs. Sub Prime
Originally Published in Charting the Markets 8/15/07
The recent decline in Thornburg Mortgage has been absolutely stunning. A CNBC interview with their straight shooting CEO, Larry Goldstone, aired just after the closing bell, you can check it out here, although be forewarned of a long introduction. The company is a solid corporate citizen, and a careful lender, with only 58 delinquent loans out of 38,000 loans in their portfolio. Mortgage originations are grinding to a halt nationwide, and Thornburg is paying the price for the sins of people we would rate pond scum, which is one tranche below subprime. News after the bell is lifting the stock, and perhaps the marketplace will allow Thornburg to gut it out until the tempest passes. It looks like Cramer was onto something after all, as this situation is as FUBAR as it gets. Katie, Bar the door!
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