This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The Five Dumbest Things on Wall Street This Week

5. Mortgaging the Future

Impac Mortgage (IMH - Get Report) is feeling the impact of the credit crunch.

The Irvine, Calif., lender canceled its common-stock dividend and laid off 144 workers Tuesday in the latest fallout from the collapse of the mortgage market. Impac joins rivals ranging from giant Countrywide (CFC) to tiny NovaStar (NFI) in slashing operations to adjust to sharp declines in U.S. housing sales and prices.

A spike in defaults on recent-vintage loans to homebuyers with poor credit histories has scared investors away from the once-vibrant market for mortgage-backed securities. The squeeze has made it difficult for lenders to raise funding in the market, at a time when demand for riskier mortgage loans has evaporated.

"Given the severe dislocation of the market place, which included unprecedented margin calls, we are left with no other alternative but to downsize our company to better operate and navigate through this difficult and unrelenting environment," CEO Joseph R. Tomkinson said Tuesday. "It is with deep sadness and regret that we are currently exiting the Alt-A mortgage business which we pioneered in the early 1990s."

Impac investors may regret seeing the value of their investments decline 84% over the past year. But that's not an emotion shared by Tomkinson, who prefers to point out his management team's many recent accomplishments.

Tomkinson allows that "we have suffered significant operating losses this year, for which we are not proud of." But he adds that Impac "has protected its shareholders from capital infusions or restructures that would have significantly diluted or wiped out our stockholders' equity in its entirety."

Thanks, but Impac shareholders could probably do without that sort of protection.

Dumb-o-Meter score: 75. "I am proud of my executive management team," the CEO adds, "for their unfailing efforts to manage through this credit crisis."

In our award-winning effort to enrich the reader experience, the Five Dumbest Things Lab now scores each item using our proprietary Dumb-o-Meter. This cutting-edge technology employs a finely calibrated, 100-point scale measuring sheer Dumbness, as calculated via a closely guarded secret formula.

Got your own idea for the dumbest thing of the week? Let us know.

Want to get your Five Dumbest in the mail? It's easy. Just become a TSC member -- it's free -- and you'll receive the Five Dumbest in our Before the Bell email newsletter every Friday. The rest of the week, before each trading day, Before the Bell gives you a comprehensive look at the stocks expected to move the market, plus access to a sampling of our premium content from RealMoney. Click here to sign up for Before the Bell!
5 of 5

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
BBY $33.50 0.00%
CC $16.51 0.00%
CBS $55.52 0.00%
IMH $20.28 0.00%
NYT $13.66 0.00%

Markets

DOW 17,730.11 -27.80 -0.16%
S&P 500 2,076.78 -0.64 -0.03%
NASDAQ 5,009.2140 -3.9090 -0.08%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs