Bloomberg - "Asset-Backed Paper Grows for First Time Since August" (1-3-08)

"For the first time since the August freeze in the credit markets, companies issued more IOUs backed by collateral as the cost to borrow in the short-term debt fell to the lowest in 22 months. Commercial paper backed by mortgages, credit-card loans and other assets rose $26.3 billion to a seasonally adjusted $773.8 billion for the week ended Jan. 2, the Federal Reserve in Washington said today."

CBIA - "CBIA Economist Predicts Slight Upturn for California’s Housing Market in 2008" (1-3-08)

"California’s beleaguered new-home market should begin a modest recovery this year, but won’t really rebound until public policy reforms to streamline the building process and promote construction of more-affordable new homes, the California Building Industry Association (CBIA) announced today. In 2008, CBIA Chief Economist Alan Nevin predicts that the market will demonstrate a slow growth."

Mortgage Bankers Association - "Mortgage Applications Decrease In Latest MBA Weekly Survey" (1-3-08)

"The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the Christmas holiday shortened week ending December 28, 2007. The Market Composite Index, a measure of mortgage loan application volume, was 533.9, a decrease of 11.6 percent on a seasonally adjusted basis from 603.8 one week earlier. On an unadjusted basis, the Index decreased 47.2 percent compared with the previous week and was down 20 percent compared with the same week one year earlier."

Bloomberg - "New Year Brings Another False Dawn for Housing" (1-3-08)

"That was the hope at year-end 2006, based on a plateau in existing home sales. After falling 13.6 percent from a peak annualized rate of 7.21 million in September 2005, sales of existing homes treaded water from September through December 2006 and came up for air in January and February before submerging again. There is hope once again that housing has bottomed -- hope that's as audacious as it is misplaced."

The Wall Street Journal - "Home Prices Must Fall FarTo Be In Sync With Rents" (1-3-08)

"U.S. house prices 'likely would have to fall considerably' to return to a normal relationship with rents, says a study by one former and two current Federal Reserve economists. The study, which doesn't necessarily reflect the views of Fed policy makers, suggests prices would have to fall 15% over five years, assuming rents rose 4% a year. House prices would have to fall further if the adjustment took place more quickly."

Bloomberg - "State Street Replaces Investment Chief After Losses" (1-3-08)

"State Street Corp., the world's largest money manager for institutions, ousted the head of its investment unit after setting aside $618 million to cover legal claims that it made inappropriate bets on subprime mortgages. William Hunt, 45, chief executive officer of State Street Global Advisors for the past three years, was replaced on an interim basis by James Phalen, 57, the company said today in a statement. State Street, which faces at least three class-action investor lawsuits, rose 8.3 percent to a record in New York Stock Exchange composite trading after the company said 2007 operating profit exceeded analysts' estimates."

The Modesto Bee - "Valley housing market to be among last to recover" (1-3-08)

"Alan Nevin, chief economist for the California Building Industry Association, forecast a modest recovering in 2008 for the state's new home industry. But he said prospects for builders in Stanislaus, San Joaquin and Merced counties are not so rosy."

SFGate.com - "Late Payments on Consumer Loans Rise" (1-3-08)

"Late payments on a cluster of consumer loans, including those for autos, home improvement and certain home equity loans, climbed in the summer to their highest point since the country's last recession in 2001. The American Bankers Association reported Thursday that the delinquency rate on a composite of consumer loans increased to 2.44 percent in the July-to-September quarter. That was up sharply from 2.27 percent in the previous quarter and was the highest late-payment rate since the second quarter of 2001, when the economy was suffering through a recession."

Dr. Housing Bubble - "Real Homes of Genius: Today we Salute you Downey. $270,000 off Peak!" (1-3-08)

"It always makes more sense to buy a small home in a very expensive posh neighborhood than to buy a larger home surrounded by mediocre homes. Of course you’ll always try to keep up with the neighbors and have home envy, but at least in appreciation terms this makes the most sense from an investment standpoint. California is rife with what I like to call Trumplites. These are folks that even though they live in a lower to middle class area, they have let the idea that their home is worth half a million infect their sense of worth and that they are now able to roll with Paris and K-Fed at SkyBar. They usually cruise up in leased cars and are swimming in so much debt, not even a life jacket can save them. Unless that jacket is outlined with diamonds and lace you can forget about them putting it on. It is the ultimate consumption and a deep ingrained financial neurosis that will be hit extremely hard once the economy declines which it will. The National Association of Realtors is delusional thinking that 2008 will be a positive year for housing"

Orange County Register - "Condo watcher eyes bottom after ‘08" (1-3-08)

"2008 is going to be a great buyers market. For sellers looking to trade up, even though they are selling with the market down a bit, they are going to be able to buy a home at a better price than they would in a seller’s market. For sellers looking to cash out, now is not the time. I believe that the condo market is going to remain a tough market through 2008, with prices on condos on a downward trend compared to what we have seen in the last few years. Sellers are definitely going to have to upgrade just to be competitive. There has been a shift in the mix of condo sales. There is an increase in the percentage of higher-priced condos in the sales mix but the 'entry-level' priced condos are down because of the difficulty in getting a loan with a higher loan to value ratio."