How To Be Pathetic: Thornburg Mortgage On Q3 Bomb

We’re watching the mortgage sector closely, because we’re concerned that its troubles could spread to the broader financial services industry and, ultimately, the rest of the economy.  Thornburg Mortgage’s (TMA) debacle yesterday was important because it confirms that the mortgage troubles have spread beyond the “sub-prime” segment (Thornburg primarily lends to rich people). We continue to believe that Internet companies will see some impact on advertising revenue–the question is how much.

In the meantime, we had to laugh when we read the explanation given by the management of Thornburg for their third-quarter disaster.  Thornburg’s pathetic blame-investors-and-take-no-responsibility position should be a lesson to any executive that wants to be taken seriously:

The unprecedented dislocation in the global mortgage finance and credit markets that began this summer presented severe challenges for the company in the third quarter. It is unfortunate that these events, especially as they relate to Thornburg Mortgage, reflected investor perception, not investment reality.

Translation: The market was actually great.  It was just you idiots who thought it sucked.

Fearing that the credit deterioration in the sub-prime mortgage markets would spread to the prime mortgage space, investors completely lost confidence in all mortgage-related investments. This erosion of investor confidence effectively led to the shutdown of the mortgage finance market.

Translation: Right now, we’re just innocent bystanders here.  But remember: Back in Q2, our success was because we were geniuses.

The company took a series of decisive actions in the third quarter as a result of events in the mortgage finance and credit markets that were beyond management’s control in order to preserve its assets and shareholder value.

Translation: We managed brilliantly.   When you investors wake up from your hallucinations, we look forward to minting money again.

If Thornburg would like to begin to improve its horrendous communications strategy, we know some good PR folks…