Dropping like flies
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The big news overnight was the resignation of Citigroup chief Charles Prince, forced to leave because of bigger-than-expected sub-prime mortgage-related losses. Prince’s departure came within days of Stanley O’Neal’s leave-taking from Merrill Lynch after disclosures of similar mortgage business problems.
Today we learn that the chief financial officer of H&R Block, the parent of the Option One sub-prime mortgage company, has stepped down. William Trubeck was the top finance guy while more than $1 billion in mortgage business losses were racked up against the company over the last five quarters. What’s more, H&R Block used emergency bank credit lines in September to pay off more than 90% of the short-term debt that creditors refused to refinance in August.
Meanwhile, bond fund guru Bill Gross expounded on CNBC this morning on the sub-prime mortgage crisis, which he called ‘a $1-trillion problem’:
‘We’ve only begun to see the pain from the standpoint of the homeowner in terms of those monthly payments,’ said Gross, the chief investment officer of Newport Beach-based Pacific Investment Management Co., or Pimco.
Who’s next to get toppled by the sub-prime mess? Could Angelo be the next to go?
Thoughts? Comments?
-- Posted by guest blogger Annette Haddad