"Home-loan house of cards ready to fall"

Excerpts [emphases mine]:

This week brings an update on the deterioration, via comments from two very knowledgeable friends. One of them, a former top executive at a subprime lender (whose chronicling of the unwind has been amazingly accurate and timely), told me that serious issues are developing, and that large companies like New Century Financial, Accredited Home Lenders and NovaStar Financial will, in his words, "hit the wall" very soon. [...]"This will, and should, take years to play out. (Federal Reserve Chairman Ben) Bernanke will yield to the Lobby and the Street, trying once again to lower rates and allow people to bail themselves out, while in turn allowing the buyout firms of the world to overpay for the companies they buy with easy money. The game is so rigged against honesty, it boggles the mind."[...]I am not as sure as he is that it will take "years" to play out. The damage will last for years, but the crackup that precedes the big damage will happen this year, I think.

Read it all, and Mr. Fleckenstein's earlier article, Voodoo Debt and the Coming Recession.

Be careful out there.

Earlier:
Mortgage lenders going bust
More on the bubble
Biggest bubble of 'em all
Advice for the New Year