Bloomberg - "Goldman May Fire 1,500 Workers in Annual Review" (1-25-08)

"Goldman Sachs Group Inc., the most profitable securities firm in Wall Street history, said it may fire as many as 5 percent of its employees, or 1,500 people, over the next few weeks to weed out underperformers. Goldman earned a record $11.6 billion last year after skirting the subprime collapse that caused historic losses at competitors such as Morgan Stanley, Merrill Lynch & Co. and Bear Stearns Cos. Banks and brokers have eliminated more than 25,000 jobs in the past six months as they racked up $136 billion of writedowns and credit losses tied to mortgage securities."

Bloomberg - "Bernanke's Easing Thwarted by Surging Commercial Mortgage Rates" (1-25-08)

"Federal Reserve Chairman Ben S. Bernanke is proving powerless to prevent a deteriorating commercial real estate market. While the yield on 10-year Treasury notes fell 1.43 percentage points in the past three months to the lowest since 2003 following four interest rate cuts, the cost of borrowing for apartment buildings, offices, retail properties and hotels climbed as much as 1.25 percentage points, according to David McLain, principal and chief investment officer of Palisades Financial LLC, a private equity firm in Fort Lee, New Jersey."

Bloomberg - "Banks May Need $143 Billion of Reserves for Insurer Downgrades" (1-25-08)

"Banks worldwide may need to raise as much as $143 billion of additional reserves to satisfy regulators if bond insurer rating cuts trigger downgrades for the securities they guarantee, Barclays Capital analysts said. Banks will need at least $22 billion if bonds covered by insurers led by MBIA Inc. and Ambac Financial Group Inc. are cut one level from AAA, and six times more for downgrades by two steps to A, Paul Fenner-Leitao wrote in a report published today. The estimates are based on banks' holdings of the outstanding $820 billion of structured securities covered by bond insurers, the report said."

Yahoo - "Stimulus plan also boosts housing market" (1-25-08)

"The economic stimulus plan announced Thursday by Congress and the Bush administration includes provisions that specifically address the mortgage crisis. It aims to make getting a mortgage easier and cheaper in high-cost markets, to facilitate refinancing and to prevent foreclosures.The package proposes temoporarily lifting the dollar amount of loans that are eligible for purchase by Freddie Mac and Fannie Mae and that can be insured by the Federal Housing Administration (FHA). The cap limits for FHA loans, which offer protection to lenders against losses that result from defaults by borrowers, will be permanent."

CNBC - "GSE Loan Limit And A Shift In Fannie Mae's Mission?" (1-25-08)

"There’s a lot of talk today about the new plan to temporarily raise the conforming loan limit from $417,000 to 125 percent of a local market’s median home price to a limit of $730,000. One of the biggest arguments is that by raising the limit, you are shifting away from the original mission of the GSE’s which was to bring affordable housing to low-to middle-income families. Some argue that in certain U.S. markets, $730,000 is in the moderate price range, but others say raising the limit just props up inflated home prices and continues to hurt home affordability."

Orange County Register - "Orange County home prices and sales, early January" (1-25-08)

"For the 22 business days ending Jan. 7, sales for all types of Orange County home sales decreased 41.8 percent. The median sales price decreased 11.2 percent. The median is where half the homes sold for more and half for less. Types of homes selling, as well as home value changes, cause the median to change."

Real Estate Journal - "Plan for a Mortgage BuyerGains Some Ground" (1-25-08)

"Senate Banking Committee Chairman Christopher Dodd floated a plan to establish a government body to buy troubled mortgages from banks and investors and move homeowners into loans insured by the federal government or bought by Fannie Mae and Freddie Mac.
Similar ideas have been discussed this year, but the Connecticut Democrat's support could give the effort a lift in the Senate. Still, the Dodd plan is likely a political long shot as many lawmakers oppose government intervention in the housing market."