Visit our new site at BusinessJournalism.org
Reynolds Center Programs
Daylong Workshops
Online Seminars
One-hour Tutorials
Barlett & Steele Awards
Professors Seminar
Strictly Financials Seminar
Research
Covering Business
Starting Out
Business Writing
Business Design
Business Glossary
Ethics
Five Questions with...
Immigration Series
Business Journalism Resources
Job Listings
Academic Programs
Book Listings and Reviews
Scholarships
Calculators
Web Resources
Tutorials
Article Index
Workshop Registration
The Reynolds Center has announced its 2009-10 free workshop schedule.
Select a workshop and register from the drop-down menu below.
Online Seminars
The Reynolds Center registration for Fall 2009 free online seminars.
Hooked on Kindle
By Chris Roush
Tracking the Business Behind the Tomato
By Jonathan Higuera
Five Questions with Bill Choyke
By Jonathan Higuera
Finding the Economy's Silver Lining
By Dick Weiss
Double Whammy: Oil and Housing
By Jennifer Hopfinger
SEC Filings Reflect Subprime Fallout
By Michelle Leder
Nov. 5, 2007
Ever since late summer, stories about the subprime mortgage market fallout have dominated the business pages. But beyond the stories of people being forced out of their houses because of sharply higher mortgage payments as their adjustable rate mortgages reset and CEOs losing their jobs (as both Citigroup CEO Charles Prince and Merrill Lynch CEO Stan O’Neal did in the past week when their respective boards lost patience with them), there’s lots of other interesting subprime stories to be told, including some that are hiding in SEC filings.
Just look at one simple indicator: the number of times the word subprime and sub-prime (believe it or not, companies tend to use the two words interchangeably) show up in various filings. At Citigroup, which sent Chairman and CEO Chuck Prince packing on Nov. 3, subprime was mentioned more than 50 times in the 10-Q that was filed on Nov. 4. Compare that to the two times that the word was used in the 10-Q that was filed in August and you start to see how quickly – and unexpectedly – the subprime mess metastasized into a fast-spreading cancer. Merrill’s most recent Q has not yet been filed, but the second quarter Q only mentioned what I’ve come to call the S-word just four times. Chances are that it will be featured much more prominently when the third quarter Q is filed.
Another way to measure what’s really going on is to head to a bank’s own website to see where their foreclosed properties are located. Most major banks, and even many smaller ones, have sites that allow you to “shop” for properties they’ve taken back via foreclosure. Countrywide Financial, one of the largest subprime lenders, has a portal that allows you to search by state, city and even zip code. I’ve been tracking the number of REO – real estate owned – homes in Florida for the past few months and have been surprised that many of the homes are in upscale places like Naples -- one indicator that the problem is not just limited to the inner cities.
It’s pretty clear that the subprime fiasco will be here for some time to come – several years, is my best guess. Reporters will need to work to make sure their stories stay fresh and that they’re not just simply filling in the blanks about fired CEOs and homeowners sent packing.
Email this article
Copyright © 2008 Donald W. Reynolds National Center for Business Journalism
The Reynolds Center has announced its 2009-10 free workshop schedule.
Select a workshop and register from the drop-down menu below.
The Reynolds Center registration for Fall 2009 free online seminars.
By Chris Roush
Tracking the Business Behind the Tomato
By Jonathan Higuera
Five Questions with Bill Choyke
By Jonathan Higuera
Finding the Economy's Silver Lining
By Dick Weiss
Double Whammy: Oil and Housing
By Jennifer Hopfinger
SEC Filings Reflect Subprime Fallout
By Michelle Leder
Nov. 5, 2007
Ever since late summer, stories about the subprime mortgage market fallout have dominated the business pages. But beyond the stories of people being forced out of their houses because of sharply higher mortgage payments as their adjustable rate mortgages reset and CEOs losing their jobs (as both Citigroup CEO Charles Prince and Merrill Lynch CEO Stan O’Neal did in the past week when their respective boards lost patience with them), there’s lots of other interesting subprime stories to be told, including some that are hiding in SEC filings.
Just look at one simple indicator: the number of times the word subprime and sub-prime (believe it or not, companies tend to use the two words interchangeably) show up in various filings. At Citigroup, which sent Chairman and CEO Chuck Prince packing on Nov. 3, subprime was mentioned more than 50 times in the 10-Q that was filed on Nov. 4. Compare that to the two times that the word was used in the 10-Q that was filed in August and you start to see how quickly – and unexpectedly – the subprime mess metastasized into a fast-spreading cancer. Merrill’s most recent Q has not yet been filed, but the second quarter Q only mentioned what I’ve come to call the S-word just four times. Chances are that it will be featured much more prominently when the third quarter Q is filed.
Another way to measure what’s really going on is to head to a bank’s own website to see where their foreclosed properties are located. Most major banks, and even many smaller ones, have sites that allow you to “shop” for properties they’ve taken back via foreclosure. Countrywide Financial, one of the largest subprime lenders, has a portal that allows you to search by state, city and even zip code. I’ve been tracking the number of REO – real estate owned – homes in Florida for the past few months and have been surprised that many of the homes are in upscale places like Naples -- one indicator that the problem is not just limited to the inner cities.
It’s pretty clear that the subprime fiasco will be here for some time to come – several years, is my best guess. Reporters will need to work to make sure their stories stay fresh and that they’re not just simply filling in the blanks about fired CEOs and homeowners sent packing.
Copyright © 2008 Donald W. Reynolds National Center for Business Journalism