The stock market is a strange jungle. Proof: One of the best-performing stocks of the past two days has been New Century Financial Corp., which until very recently was the No. 2 subprime mortgage lender. Its shares closed on Wednesday at 67 cents apiece, a bit less than the price of a take-out hamburger. But subprime’s prospects have gotten a tiny bit brighter since then, with some big firms talking about injecting money into the industry. Any bottom-fishers who bought NEWC at Wednesday’s close are all smiles today. At one point today, New Century was trading at $2.97 a share. That’s an increase of 343%. (It has come back down a little since.) If you really want to get ridiculous, imagine that New Century kept rising at this rate. After one year, your 67 cents would be worth more than all the money on the planet. (Then again, this may be the highest the stock ever gets again.)
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.