Now that the easy money is gone, a lot of people are getting out of the subprime business. The latest fallout to hit the newswires comes from the folks at GE (NYSE: GE ) who, according to this report at CNBC, have "realigned our resources to meet customer needs."
Translated into English, it means that slightly more than half of the WMC mortgage unit will be fired. Oops, excuse me. GE likes the old-school euphemism: "layoff."
I suggest a new piece of insufferable business jargon to describe the act of putting people in dire financial straits: "Poorhousing."
For example: By "poorhousing" half its subprime staff, and reducing its subprime business, hopefully GE can avoid poorhousing too many American subprime housing debtors, increasing numbers of whom face payments they can no longer afford.
In related news, Fannie Mae (NYSE: FNM ) and Freddie Mac (NYSE: FRE ) have said they'll step outside their usual, credit-worthy repackaging practices and support the rapidly deteriorating market for subprime housing paper. However, that's a small, cynical, and self-serving maneuver. Both of those firms are still trying to avoid the bureaucratic oversight they so richly deserve. They obviously hope to score points with knee-jerk politicians whose own hides are on the line. The latter (Frank, Schumer, Clinton, et al.) need to pretend they can do something to slap a bandage on the deflating housing bubble, which they ignored when it was convenient for them to do so. Thus, we see this recent unholy alliance.
The move at GE, however, is the real sign of the times. The party's over.
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At the time of publication, Seth Jayson had no positions in any company mentioned here. See his latest blog commentary here. View his stock holdings and Fool profile here. Fannie Mae is a Motley Fool Inside Value recommendation. Fool rules are here.