Subprime and the Kingdom of Sweden…

images.jpegBecause it’s the beginning of a new month, I wanted to do a routine check on how companies are disclosing their subprime exposure (or sub-prime, as I learned in this post from two weeks ago) in SEC filings. In September, there were 828 filings that mentioned either subprime or sub-prime, compared with only 390 in September 2006. Despite the increase, it does represent a cooling-off from the 1,258 for the month of August, though to be fair, there tends to be a lot more Qs filed in August, then in September, so it’s probably a reflection of that, instead of a decline in the number of companies disclosing a problem.

But when I started to take a closer look at the filings, I found some interesting things, including this exhibit in a filing from the Kingdom of Sweden (who knew that Kingdom’s were required to file with the SEC?) which included this disclosure:

Recent, widely discussed problems in the sub-prime mortgage market have led to greater uncertainty about the magnitude of the U.S. economic slowdown in 2007. Because more and more people with subprime mortgages are having trouble making payments, many lenders have declared bankruptcy. Falling house prices and rising mortgage rates have probably caused these problems. It is not inconceivable that the impact on house prices will thereby increase and detrimentally affect household consumption even more than anticipated by the base scenario of this forecast.

It was the “many lenders have declared bankruptcy” part that stopped me. To be sure, there was New Century and American Home, both of which filed for bankruptcy. A few other smaller companies come to mind too. But using the word many seems like a bit of a stretch. Still, a quick skim of the 101-page report is pretty interesting, especially its’ section about the U.S. economy.