Reuters - "Subprime Crisis May Spread Further-Swiss Regulator" (12-17-07)

"The subprime crisis is not over yet and could spread to other credit markets, making it important that banks have a strong capital base, a Swiss regulator and prominent member of the Basel Committee said. 'The danger is not over yet. The subprime crisis could spread to other credit markets, such as in the fields of credit cards, consumer credit, car financing, student loans or commercial credit,' Daniel Zuberbuehler, head of the Swiss Banking Authority (EBK), told newspaper NZZ am Sonntag in an interview published on Sunday."

Reuters - "Japan big banks reluctant to pay for subprime fund" (12-17-07)

"Japan's top three banks are expected to resist a request to put up a total of $15 billion for a U.S.-led subprime rescue fund, a move that could further cloud prospects for the bailout plan."

Business Week - "Subprime: A Predictable Surprise" (12-17-07)

"In 2004, my colleague Max Bazerman and I published Predictable Surprises: The Disasters You Should Have Seen Coming and How to Prevent Them. We defined 'predictable surprises' as problems that (1) at least some people are aware of, (2) are getting worse over time, and (3) are likely to explode into a crisis eventually but are not prioritized by key decision-makers or have not elicited a response fast enough to prevent severe damage. We supported our thesis with detailed analyses of the September 11 attacks, the collapse of Enron, and the war in Iraq. While embraced by many, our work on predictable surprises came under predictable attack. 'Hindsight is 20:20' the critics said. In response, Max and I were able to point to specific instances where we had accurately predicted major problems: Max wrote about congressional testimony on conflicts of interest in the auditing of public companies, and I had written about the dire consequences of an invasion of Iraq for me. But some critics remained unmoved."

NAHB - "Builder Confidence Remains Unchanged For Third Consecutive Month" (12-17-07)

"Builder confidence in the market for new single-family homes remained unchanged for a third consecutive month in December as problems in the mortgage market and excess inventory issues continued, according to the latest NAHB/Wells Fargo Housing Market Index (HMI), released today. The HMI held even at 19 this month, its lowest reading since the series began in January 1985."

NAHB - "Senate Approves Bill To Eliminate Taxes On Forgiven Mortgage Debt" (12-17-07)

"In a move to address the subprime lending crisis and to help struggling home loan borrowers, the Senate on Dec. 14 approved legislation that would eliminate any taxes home owners might face when banks renegotiate the terms of a home loan and forgive a portion of the outstanding mortgage debt. The change in the tax law would cap untaxable forgiven mortgage debt at $2 million and apply only to principal residences."

Bloomberg - "Paulson Favors Fannie, Freddie Buying Jumbo Mortgages" (12-17-07)

"Treasury Secretary Henry Paulson said Fannie Mae and Freddie Mac, the largest sources of finance for American mortgages, may help 'jump start' the market for the largest home loans. Paulson said in an interview today that he favors temporarily allowing the two companies to purchase so-called jumbo loans, which exceed $417,000. He said the proposal should be part of a package of legislative changes governing the two government chartered companies."

Bloomberg - "California Pension Votes $29 Billion Shift of Funds" (12-17-07)

"The California Public Employees' Retirement System, the largest U.S. public pension, agreed to shift 11 percent of its $260 billion portfolio into private equity and other investments from stocks and bonds. The fund board agreed in a 9-3 vote to reduce fixed-income investments to 19 percent from 26 percent of assets and to lower stock holdings to 56 percent from 60 percent. The money will be shifted into private equity, real estate and a new asset class of inflation-linked investments."

Bloomberg - "Centro Slumps 76% on Struggles to Refinance Debt" (12-17-07)

"Centro Properties Group, the owner of 700 U.S. shopping malls, slumped 76 percent in Sydney trading after saying it's struggling to refinance debt because of the collapse in the subprime mortgage market. Melbourne-based Centro suspended dividends and said in a statement that it may have to sell assets, after lenders set a Feb. 15 deadline to negotiate maturing debt. Traditional sources of funding are 'shut for business,' Chairman Brian Healey said in the statement."

Los Angeles Times - "Critics question Anaheim's vision of its future" (12-17-07)

"Anaheim city leaders envision the Platinum Triangle as the county's new downtown, with enough commercial office space to rival the Miracle Mile in Los Angeles. But City Council approval last week of expansion plans has drawn criticism from urban experts who say the project is seriously flawed because of an unhealthy jobs-to-housing imbalance -- and the glaring lack of planned low-cost housing among the 18,363 permitted units."

Orange County Register Blog - "O.C. home inventory at 14 months of sales" (12-17-07)

"Every two weeks, market watcher Steve Thomas at Re/Max Real Estate Services in Aliso Viejo calculates 'market time,' a benchmark of how many months it theoretically takes to sell all the inventory in the local MLS for-sale listings at the current pace of pending deals being made. By this Thomas logic, it would take 14.05 months for buyers to gobble up all homes listed for sale at the current pace of deals vs. 13.49 months two weeks earlier and vs. 6.88 months a year ago."

Real Estate Journal - "What to Do if You Can't Pay Your Mortgage" (12-17-07)

"Question: What do I do when I owe a $450,000 first mortgage, a second at $115,000 and new houses the same as mine are selling for $500,000? I owe two months on the first and two months on the second, and I cannot pay. What do I do?
Answer: Your situation, and that of thousands of other folks like you, is serious. You are, indeed, in dire straights. You are 'under water' by $65,000, not including your selling costs. And you'll probably have to take less than $500,000 to sell quickly or beat the competition."