This sub-prime quagmire is dragging a lot of companies down with it. One minute, you’re a creditor. The next minute, you’re a debtor. Voila! Does this remind anyone of 2000? First, the shaky internet companies fell. Yeah, those that are not around today. Then, the rest of the ecosystem got bludgeoned. Even the big guys.
Sure, some pundits are talking about segmentation in the real estate and how the sub-prime quagmire has hurt the entry-level real estate market while leaving the higher end market intact. Flight to quality? I don’t buy it. The real estate market is too interconnected and if home prices are out of reach for entry-level buyers, than those holding entry-level homes cannot turn around and sell them (at current prices) and upgrade to a nicer home or nicer neighborhood.
Anyways, I’ve added American Home Mortgage Investment Corp. contracts. They filed for bankruptcy protection earlier last month.