Yahoo - "Home Sales Plunge, Feed Recession Fears" (12-28-07)

"The housing market plunged deeper into despair last month, with sales of new homes plummeting to their lowest level in more than 12 years. The slump worsened even more than most analysts expected, heightening fears that the country might be thrust into a recession."

CNN - "How they got housing wrong" (12-28-07)

"Before you put much hope in forecasts for a 2008 rebound in the battered housing market, consider this: A year ago at this time many top economists were looking for that recovery to begin in 2007. Instead, the year saw historic declines in nearly every measure of housing strength and home building, and left a trail of predictions from some of the nation's top economists that look - at best - foolish."

Market Watch - "Wachovia well positioned for rough 2008, CEO says" (12-28-07)

"As a brutal year in the financial-services industry comes to a close, Ken Thompson believes Wachovia Corp. is prepared to weather the storm in the nation's housing and credit markets. 'I'm expecting a slower growth year than we've experienced anytime over the last five or six years,' Thompson said Thursday in an interview. 'We're still in the midst of a housing correction, which is impacting the real economy, but I do not expect a recession.'"

Los Angeles Times - "How to survive the bust" (12-28-07)

"The cold, hard truth is that foreclosures are serving only to hasten the painful process of shifting housing prices back to a level the market can sustain. Prices must and will fall. Everywhere. Probably 25% to 30% from their peak. 2008 is the year when gravity will reassert itself. You should be adjusting your expectations of your home's value so that it's correctly aligned with market realities. And when making important financial decisions today, be realistic and factor those declines in."

Los Angeles Times - "Defaults moving beyond sub-prime" (12-28-07)

"Thought the mortgage meltdown was just a sub-prime affair? Think again. There's another time bomb waiting to explode, experts say: risky loans made to people with good credit.So-called pay-option adjustable-rate mortgages, or option ARMs, were the easiest and most profitable home loans for lenders and brokers to make for much of this decade. Last year, they accounted for about 9% of the volume of all mortgages made in the U.S. and were especially popular in California, Florida and Nevada -- states where home prices rose the most during the housing boom and are now falling most sharply."

Real Estate Journal - "How Wizardry AmplifiedThe Credit Crisis" (12-28-07)

"Norma CDO I Ltd., as its full name goes, is one of a new breed of mortgage investments created in the waning days of the U.S. housing boom. Instead of spreading the risk of a global home-finance boom, the instruments have magnified and concentrated the effects of the subprime-mortgage bust. They are now behind tens of billions of dollars of write-downs at some of the world's largest banks, including the $9.4 billion announced last week by Morgan Stanley. Norma illustrates how investors and Wall Street, in their efforts to keep a lucrative market going, took a good idea too far. Created at the behest of an Illinois hedge fund looking for a tailor-made bet on subprime mortgages, the vehicle was brought into existence by Merrill Lynch & Co. and a posse of little-known partners."