“…the very nature of mortgage securities has changed, as Wall Street has been swallowing up mortgage companies, trading securities in a manner reminiscent of the technology bubble, are now beginning to feel the pinch
…how rating companies are only delaying the inevitable by stubbornly refusing to downgrade ratings… there will be record losses in pension funds and other other areas exposed to residential mortgage-backed securities
…New Century Financial, a lender to the ‘cash poor’, whose shares had lost half their value in three weeks, and needed emergency funding to survive. Failure to identify such problems was symptomatic of the technology stock bubble burst.”
The most obvious connection, is that the bouyant market has been propping up the economy. A tightening of credit is likely to affect corporate profits.
