Bloomberg - "Bristol-Myers Posts Quarterly Loss on Investments" (1-31-08)

"Bristol-Myers Squibb Co., the maker of the anti-clotting pill Plavix, reported a fourth-quarter loss from investments in subprime securities that led to a $275 million charge. The subprime related expenses, the first recorded by a drugmaker in the quarter, may rise to as much as $417 million, said Rebecca Goldsmith, a spokeswoman for the New York-based drugmaker, in a phone interview today. The company also booked $522 million in costs for restructuring and an acquisition, recording a net loss of $89 million, or 5 cents a share."

Bloomberg - "MBIA Posts Biggest Loss, Considers New Capital Plans" (1-31-08)

"MBIA Inc., the world's largest bond insurer, posted its biggest-ever quarterly loss and may raise more capital to offset a slump in the value of subprime-mortgage securities. The fourth-quarter net loss was $2.3 billion, or $18.61 a share, prompting concern that the Armonk, New York-based company will lose its top credit rating. MBIA reported a day after FGIC Corp.'s insurance unit became the third financial guarantor lost its AAA grade by Fitch Ratings."

Times Online - "FBI targets senior bankers in far-reaching sub-prime fraud inquiry" (1-31-08)

"America's Federal Bureau of Investigation is investigating senior banking executives for insider dealing and fraud as part of a criminal inquiry into the sub-prime crisis, the agent leading the inquiry said yesterday. Neil Power, the head of the FBI's economic crimes unit, is heading the most far-reaching criminal investigation into the practices of the mortgage industry since it began to melt down last year, after years of increasingly lax lending finally fed through into an increase in defaults on home loans."

Yahoo - "Investors Want More Interest Rate Cuts" (1-31-08)

"Federal Reserve Chairman Ben Bernanke, criticized last year for being too tentative in cutting interest rates, has shown he can act boldly. But the Fed's two aggressive rate cuts in the past eight days have left investors demanding still more."

Economist.com - "Aggressive activism" (1-31-08)

"NO ONE could accuse America’s policymakers of standing pat as the economy flirts with recession. Congress is close to passing a fiscal-stimulus package worth just over 1% of GDP (the House of Representatives passed its version at $146 billion this week. And the Federal Reserve is loosening the monetary reins at the fastest pace in decades."

Orange County Register - "Calif. real estate licenses suffer first drop since ‘99" (1-31-08)

"The California Department of Real Estate reports that real estate licenses decreased vs. the year before in December for the first time since March 1999. As of December, the state had 548,959 folks with a real estate license — still the third highest number on record and equal to one licensee for every 22 Calif0rnia households or one for every 1.4 homes sold last year. But that’s down 0.1% from the number of licensees in December 2006 and from last November."

Los Angeles Times - "Trying to tap into home equity? We'll see" (1-31-08)

"Tens of thousands of homeowners with home equity lines of credit are getting a rude surprise: They've been told by their lender that they can no longer take money out on their credit lines because sinking home prices have put them "upside down" on their mortgages. Countrywide Financial Corp. sent letters to 122,000 customers last week telling them they could no longer borrow against their credit lines because the total debt on the home exceeded the market value of the property. The lender says it is using computer modeling to determine which of its customers would have their cash spigot shut off."

Los Angeles Times - "Democrats propose new agency to deal with foreclosures" (1-31-08)

"Senate Democrats today demanded a much more forceful response to the crisis of home foreclosures, including the possible creation of a new government body that would purchase failing mortgages and help troubled borrowers refinance into new loans."

Real Estate Journal - "Lawmakers Offer PlansFor Homeowner Refinancing" (1-31-08)

"Lawmakers, looking for ways to aid homeowners in need of refinancing, are considering raising the caps on how much money states can borrow to finance housing projects, and easing other restrictions. Several lawmakers, Democrats and Republicans, are recommending raising the limits on tax-exempt municipal mortgage revenue bonds as a way to ease refinancing."

NAHB - "Fed Rate Cut A Positive Step, Now Congress Must Act On Stimulus, Builders Say" (1-30-08)

"The Federal Reserve’s decision to cut short-term interest rates today by half a percentage point is another step in the right direction to shore up a weakening economy, according to the nation’s home builders. 'We urge Fed policymakers to monitor events closely and be prepared to enact further cuts in the future,' said Brian Catalde, president of the National Association of Home Builders (NAHB) and a home builder from El Segundo, Calif."

CBIA - "State New-Home Production Last Year Fell to Lowest Level in 25 Years, CBIA Announces" (1-30-08)

"California single-family home construction in 2007 fell to the lowest level in 25 years as builders around the state dramatically ratcheted back production in response to a softer sales environment, the California Building Industry Association reported today. According to statewide data compiled by the Construction Industry Research Board, permits for 112,300 new homes, condominiums, townhomes and apartments were issued statewide, down nearly 32 percent from 2006 and 100,000 units less than recorded in the most recent peak year of 2004."

Bloomberg - "UBS Reports Record Loss After $14 Billion Writedown" (1-30-08)

"UBS AG posted the biggest loss ever by a bank after raising fourth-quarter writedowns on securities infected by U.S. subprime mortgages to $14 billion. Europe's largest bank by assets said today it had a net loss of 12.5 billion Swiss francs ($11.4 billion) for the quarter, almost double the median estimate of analysts surveyed by Bloomberg. The annual shortfall was about 4.4 billion francs, the first since Zurich-based UBS was created through a merger a decade ago."

Bloomberg - "Merrill Plans to Cut Back on CDOs, Structured Finance" (1-30-08)

"Merrill Lynch & Co., the world's largest brokerage, will cut back on packaging home loans and consumer debts into securities after the collapse of the subprime mortgage market eroded demand for the products."

Bloomberg - "Subprime Lenders Get Big Accounting Break at SEC" (1-30-08)

"Just when it seemed as if the mortgage mess had hit a new low, now comes this: The Securities and Exchange Commission's staff has granted the subprime-lending industry a huge exemption from the normal rules for off-balance- sheet accounting. In effect, the move will let home lenders keep their balance sheets looking much smaller and less leveraged, even while the off-the-books loans they made get a makeover."

Yahoo - "Mortgage applications near 4-year high" (1-30-08)

"Applications for home mortgages jumped to their highest level in nearly four years as low interest rates led more homeowners to seek refinancing, according to data from an industry group on Wednesday."

Financial Times - "Distressed LBO debt" (1-30-08)

"Before credit markets turned toxic last August, a favourite game was to pinpoint the next big leveraged buy-out target. These days, it is more fun to guess where the first buy-out blow-up might occur. Private equity likes to fix problems behind closed doors. But while the equity is private, much of the associated debt is not. Martin Fridson of Distressed Debt Investor has analysed the pricing of 176 bonds and loans relating to US LBOs completed between January 2002 and September 2007."

The San Diego Union Tribune - "Buying or renting, housing is still pricey" (1-30-08)

"Aspiring home buyers may be cheering the steep drop in housing prices, but the reality is that most workers in San Diego County still do not earn enough to buy the median-priced home of $440,000, according to a study released yesterday. Even grimmer news awaits lower-income households struggling to pay monthly rent. The study by the Center for Housing Policy found that the income needed to affordably rent an average two-bedroom apartment here has risen 13 percent in the last year. That is the third-highest increase among more than 200 metropolitan areas studied nationwide, according to the report."

The San Diego Union Tribune - "Withering of nation's home prices continues" (1-30-08)

"U.S. home prices plunged by a record 8.4 percent in November, marking two years of slowing returns, according to a major index released yesterday. The decline in the Standard & Poor's/Case-Shiller composite home-price index followed a 6.7 percent year-to-year decrease in October. The November performance was the 11th straight monthly decline for the index, which tracks prices of single-family homes in 10 metropolitan areas."

The San Diego Union Tribune - "Countrywide deal still 'a go'" (1-30-08)

"The $422 million loss Countrywide Financial reported yesterday didn't appear to scare off Bank of America. 'At this point, everything is a go to complete this transaction,' Bank of America Chief Executive Ken Lewis said at an investor conference in New York."

Los Angeles Times - "Foreclosures up 435% in the Valley" (1-30-08)

"Foreclosures soared 435.5 percent in the San Fernando Valley last year as nearly 3,000 homeowners surrendered to higher monthly house payments brought on by rising adjustable rate loans, a research center said Tuesday."

CAR - "C.A.R. reports sales decrease 33.4 percent, median home price falls 16.5 percent" (1-29-08)

"Home sales decreased 33.4 percent in December in California compared with the same period a year ago, while the median price of an existing home fell 16.5 percent, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today. December is typically one of the slower months for sales, and the liquidity crunch continued to dampen sales beyond the normal seasonal decrease,” said C.A.R. President William E. Brown. Even so, seasonally adjusted sales edged above 300,000 homes for the first time since August 2007."

CNN - "Home ownership in record plunge" (1-29-08)

"The housing and mortgage meltdown caused the biggest one-year drop in the rate of homeownership on record, according to government figures released Tuesday. The decline, while expected, is yet another indication of the housing market's sudden and dramatic turn. The Census Bureau report showed that home owners accounted for 67.8% of occupied homes in the fourth quarter, down 1.1 points from a year earlier. It's the largest year-over-year drop recorded in the report."

CNN - "Foreclosures up 75% in 2007" (1-29-08)

"The number of foreclosures soared in 2007, with 405,000 households losing their home, according to a report released Tuesday. That's up 51 percent from the 268,532 homes that were repossessed in 2006. Total foreclosure filings soared 97% in December alone compared with December of 2006, according to RealtyTrac, an online seller of foreclosure properties. For the year, total filings - which include default notices, auction sale notices and bank repossessions - grew 75%."

Reuters - "Countrywide: 1 in 3 subprime mortgages delinquent" (1-29-08)

"Countrywide Financial Corp, the largest U.S. mortgage lender, on Tuesday said more than one in three subprime mortgages were delinquent at year-end in the $1.48 billion portfolio of home loans it services. Countrywide said borrowers were delinquent on 33.64 percent of subprime loans it serviced as of December 31, up from 29.08 percent in September. It also said borrowers were at least 90 days late on payments on 17.25 percent of subprime mortgages."

Reuters - "Goldman, Morgan Stanley probed on subprime" (1-29-08)

"Investigators are seeking information from Goldman Sachs Group Inc and Morgan Stanley, Wall Street's largest banks by market value, regarding their activities related to subprime mortgages. In its annual report filed with the U.S. Securities and Exchange Commission, Goldman said it was cooperating with requests from governmental agencies and self-regulatory organizations for information about securitizations, collateralized debt obligations and synthetic products related to subprime mortgages."

Orange County Register - "S&P puts LA/OC home-price dip at 12%" (1-29-08)

"L.A./O.C. home prices fell 11.9% in the year ended in November, by the math of S&P/Case-Shiller indexes. That’s the worst depreciation rate in this database that dates to 1987, as this chart shows. The only good news in this may be that of the 20 major U.S. markets these guys track, five have suffered deeper one-year losses than L.A./O.C. A 20-city composite index is off 7.7% in the same year."

Los Angeles Times - "LA: America's biggest bubble, biggest price drops" (1-29-08)

"According to Case-Shiller data, L.A. still has America's biggest housing price gains since 2000 (aka America's biggest housing bubble), but L.A. prices are falling faster than any other city in America."

Real Estate Journal - "Elements of Mortgage-Relief Plan Still Need to Be Worked Out" (1-29-08)

"The government's plan to rev up the home-mortgage market could lower borrowing costs for a wide swath of Americans, from middle-class families in high-cost cities to those who may be facing foreclosure, but many crucial details of the plan remain to be worked out. Congressional leaders and the Bush administration announced the plan Thursday as part of a broader set of moves aimed at juicing the economy. The mortgage relief would allow Fannie Mae and Freddie Mac to purchase or guarantee loans of as much as 125% of an area's median home price, with a cap placed at roughly $730,000, according to House Democrats. Some House Republicans, though, are trying to push that number down to $625,000. The current limit is $417,000."

NAHB - "Weak-New Home Sales Show Need For Housing Stimulus" (1-28-08)

"New single-family home sales fell 4.7 percent in December, according to figures released today by the U.S. Commerce Department. December’s seasonally adjusted annual rate of 604,000 units was 40.7 percent below a year ago."

Market Watch - "Builders slash prices 10%, but sales fall anyway" (1-28-08)

"U.S. builders slashed prices by more than 10% in December in a failed bid to boost sales, which dropped about 5% to the lowest level in nearly 13 years, the Commerce Department reported Monday."

CBS - "House Of Cards: The Mortgage Mess" (1-28-08)

"It was another nervous week for the world's financial markets and for Wall Street. In the last six months, Americans have seen their investments shrink, their property values plummet, and the country edge closer towards a recession. At the heart of the problem is something called the subprime mortgage crisis, which began last summer and continues to ricochet through the economy. It sounds complicated, but it's really fairly simple. Banks lent hundreds of billions of dollars to homebuyers who can't pay them back. Wall Street took the risky debt, dressed it up as fancy securities, and sold it around the world as safe investments. It sounds like a shell game or Ponzi scheme; in some ways, it was a house of cards rife with corruption, greed, and negligence."

Yahoo - "Time for Bernanke to take a stand" (1-28-08)

"Enough is enough. It's time for Ben Bernanke and the rest of the Fed to pull a page from Tony Danza's book and show investors who's the boss. Yes, the economy is teetering on the edge of a recession, if it isn't already in one. But the Fed has already cut the fed funds rate by 175 basis points since September. If the Fed lowers rates much further, it risks going too far."

USA Today - "CEO Profile: Defensive mind-set keeps Toll Bros. going" (1-28-08)

"Since Bob and Bruce founded Toll Bros. (TOL) in 1967, they've used the same defensive mind-set to survive the ups and downs of the real estate cycles. The current housing recession is the worst his company has seen since 1974, Bob Toll says, and the bottom of this one is still at least half a year away, according to a majority of 51 economists surveyed by USA TODAY. Yet so far, Toll Bros. is holding up better than many of its national rivals. Toll built 6,687 luxury homes in 22 states last year, down nearly one-quarter from its peak two years ago. In the fourth quarter, orders for new homes fell a staggering 35%, and the company posted an $82 million loss — its first ever. Even so, Toll still commands one of the strongest positions in the industry, in part because the company's up-market buyers are less affected than most by the turmoil in the financial markets."

CNN - "Foreclosures spike - and will get much worse" (1-28-08)

"A report released Monday by First American Core Logic rates foreclosure risk for 381 metropolitan areas, and found that the risk of foreclosure has jumped 22 percent from January 2007, and 9 percent from three months ago. The risk scores are calculated based on economic factors such as job growth or loss, as well as incidences of fraud and other risks. Home price trends are especially important."

Bloomberg - "Merrill's Fakahany to Depart After Subprime Losses" (1-28-08)

"Merrill Lynch & Co. Co-President Ahmass Fakahany is stepping down, two weeks after the third- biggest U.S. securities firm posted a record loss on subprime mortgages and bonds acquired while he oversaw risk management. Fakahany, 49, will retire Feb. 1, New York-based Merrill said today in a statement. Co-President Greg Fleming, who served alongside Fakahany as a deputy to former Chief Executive Officer Stan O'Neal, plans to remain under new CEO John Thain, according to a person familiar with the situation."

Los Angeles Times - "Walk away from your mortgage, or stay?" (1-28-08)

"For those with itchy feet and a budget of roughly 100 times that -- $995 -- there is You Walk Away, which promises to tell you the best, simplest way to, yes, walk away from your mortgage. I'm not sure why it requires three payments of $332 to learn how to walk, but this website encourages you to 'Unshackle yourself today from a losing investment and use our proven method to Walk Away.'"

Real Estate Journal - "Washington Sets $150 Billion Plan To Give a Jolt to the Economy" (1-28-08)

"Congress and the White House hammered out an economic stimulus package that would put $150 billion into the hands of consumers and businesses while seeking to revive the market for large mortgages. It was a rare display of compromise and speed in a city known recently for partisan gridlock. Both parties were responding to middle-class economic fears, as election-year nerves are frayed by a seesawing stock market, a wave of home foreclosures and a credit crunch. "I can't say that I'm totally pleased with the package, but I do know that it will help stimulate the economy," said House Speaker Nancy Pelosi."

The San Diego Union Tribune - "Only thing tax rebates will stimulate is our debt" (1-27-08)

"I don't know about you, but I'm already developing a list of ideas for how to use that check the government will soon be sending out to stimulate the economy: pay off my income taxes, pump up the kids' college funds and pay for a couple of things in cash instead of using my credit card. Unfortunately, that is precisely the kind of thinking that our fearless leaders in Washington hate. Which is one reason I doubt this $145 billion 'financial stimulus' program will have any significant or lasting effect on the economy, other than to put the government $100 billion deeper in debt."

The San Diego Union Tribune - "Low interest rates spur surge in refinancing" (1-27-08)

"Nobody can answer these questions for certain, but there's no doubt about this: Thanks to the lowest mortgage interest rates in a year and a half – an average 5.73 percent for conforming 30-year fixed-rate loans and 5.21 percent for 15-year loans – nearly 60 percent of all new mortgage applications by mid-January were for refinancings, according to data compiled by the Mortgage Bankers Association."

The San Diego Union Tribune - "Tax breaks enacted in '07 offer homeowners some relief" (1-27-08)

"Homeowners found three attractive tax breaks among their holiday presents, thanks to the federal Mortgage Forgiveness Debt Relief Act of 2007, which was enacted in December. The first tax break concerns forgiveness of debt, which occurs when a lender forgoes repayment of principal and/or interest the borrower owes."

Yahoo - "Paulson Pushes Senate for Stimulus Deal" (1-27-08)

"President Bush's chief negotiator on an economic aid deal said Sunday the Senate should quickly get behind a plan or risk drawing the resentment of a frustrated public. The president and House leaders have agreed on a proposal to provide tax rebate checks to 117 million families and give businesses $50 billion in incentives to invest in new plants and equipment. The goal is to help head off a recession and boost consumer confidence."

The San Diego Union Tribune - "Mortgage lenders pledge millions to help counsel homeowners at risk of defaulting" (1-27-08)

"Major mortgage lenders have pledged $4.6 million to hire more mortgage counselors in California to help homeowners at risk of defaulting on their home loans, an advocacy group said recently. Eight mortgage lenders, including Merrill Lynch, Wells Fargo Bank and Countrywide Financial Corp., pledged funds along with the San Francisco Foundation and the California Community Foundation, according to the California Reinvestment Coalition."

Bloomberg - "Countrywide's Underwriters Sued for Fraud by New York Agencies" (1-26-08)

"Three New York agencies sued Goldman Sachs Group Inc., Citigroup Inc., JPMorgan Chase & Co. and 23 more underwriters for allegedly helping Countrywide Financial Corp. to defraud investors. New York's city and state comptrollers and their pension funds added the securities firms, two accounting firms and Countrywide officers and directors as defendants in a federal securities-fraud lawsuit filed against the home lender in August."

The Mortgage Insider - "Why Raising Conforming Limits Is a Bad Idea" (1-26-08)

"With all due respect to Governor Arnold-ator, Congressional action to raise conforming loan limits is ill-conceived. First, in response to the notion that allowing the GSEs to securitize larger loan amounts will bring pricing stability to the market, don’t hold your breath. Given the pricing adjustments we’ve seen incorporated for conforming product over the last few months, don’t be surprised if the same translates into the Jumbo market. With Fannies announcement today that thei serious delinquency rate shot up 50% in November compared with a year ago, they’ve shown that they are no better equipped to manage risk than the rest of the market. Of course, having purchased nearly 40% of Countrywide’s subprime product in Q1 of 2006 might have something do with this increase. You think?"

Orange County Register - "Insider Q&A hears O.C. office market is ‘weak’" (1-26-08)

"The market is weak right now. There is excess supply thrown on the market by the contraction in the home-mortgage finance industry and the real estate industry. We survey real estate professionals in Orange County and they see this condition persisting through 2010."

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."

StarTribune.com - "Are American consumers too strapped to spend?" (1-24-08)

"With Tuesday's announcement of the steepest interest rate cut in more than two decades and President Bush and congressional leaders showing rare unity working on a tax rebate that could reach $1,600 for couples, U.S. officials hope a little extra cash in everyone's pocket will quickly pass through to the nation's struggling economy. Consumer spending accounts for 70 percent of the domestic economy."

Financial Times - "Dodd seeks ‘ambitious’ financial rescue plan" (1-24-08)

"Christopher Dodd, the Senate banking committee chairman, insisted on Wednesday that any economic stimulus package for the US must go beyond short-term measures, proposing a new $10bn-$20bn fund that would buy outstanding mortgages at steep discounts to help distressed homeowners."

The Boston Globe - "It's time to save the housing sector" (1-24-08)

"THE ECONOMIC crisis now unfolding is not like other postwar recessions, which could be fixed with low interest rates and deficit spending. This crisis reflects the collapse of major parts of the financial sector. That's why the Federal Reserve convened a rare emergency meeting Monday and slashed short-term rates by three-quarters of a point, to 3.5 percent. But the structural damage to the financial economy can't easily be fixed with low interest rates."

Market Watch - "Lennar's fourth-quarter loss widens" (1-24-08)

"Lennar Corp.'s fourth-quarter loss widened to $1.25 billion, or $7.92 a share, from a year-earlier loss of $195.6 million, or $1.24 a share, as the company booked a $7.50-a-share charge related to valuation adjustments and other write-offs. Revenue dropped 51% to $2.18 billion from $4.27 billion, due primarily to declines in the number of home deliveries and average sales prices. Analysts polled by Thomson Financial expected, on average, a loss of $1.65 a share on revenue of $2.06 billion. The Miami homebuilder said it doesn't expect market conditions to improve in 2008, and may continue to decline in the near term."

NAR - "Existing-home Sales Down in December but 2007 was Fifth Highest on Record" (1-24-08)

"Existing-home sales declined in December following several months of stable activity, with total sales in 2007 at the fifth highest on record, according to the National Association of Realtors®. Existing-home sales – including single-family, townhomes, condominiums and co-ops – slipped 2.2 percent to a seasonally adjusted annual rate1 of 4.89 million units in December from a pace of 5.00 million in November, and are 22.0 percent below the 6.27 million-unit level in December 2006."

NAHB - "Housing Incentives Key To Success Of Stimulus Package" (1-24-08)

"To help stimulate the economy and address the current housing situation, NAHB, in a letter to lawmakers, urged them to consider the following policy options when crafting a stimulus package: Create a tax credit for the purchase of a home. Expand the net operating loss (NOL) tax deduction. Expand the mortgage revenue bond program. Designate housing as an eligible investment for tax-preferred retirement accounts.Increase the conforming loan limit for Fannie Mae and Freddie Mac."

Bloomberg - "Morgan Stanley to Cut About 1,000 Jobs, Person Says" (1-24-08)

"Morgan Stanley, the second-biggest U.S. securities firm, plans to eliminate about 1,000 jobs as economic growth slows and the profit outlook dims, according to a person familiar with the matter. The cuts will affect asset management, retail brokerage and support areas such as technology and administration, the person said. They aren't expected to target the New York-based firm's institutional securities division, which includes trading and investment banking, the person said."

Yahoo - "Best and Worst Places to Buy a House" (1-24-08)

"The housing crunch and the excessive inventory -- exceeding 10 months on resale homes -- continues to take its toll on housing prices. But over the long term, housing is still a good investment. In fact, it's more than an investment; it's a home. Plus, you're not really saving anything by renting, as the costs of renting and owning are about equal (well, owning may be a little more). The tax benefits of home ownership far outweigh renting, too. With good housing prices in many great areas, this may indeed be the time to buy."

Orange County Register - "What the Fed cut means to O.C. housing" (1-24-08)

"Mortgage brokers quoted rates as low as 5 to 5.25 percent in Orange County on Tuesday for a 30-year fixed mortgage with a one-point fee. But that's only for conforming loans, which are up to $417,000 and can be sold to government-sponsored companies such as Fannie Mae, the largest U.S. funder of home loans. However, because of high home prices in the county many shoppers get jumbo loans, which are above $417,000. Brokers quoted jumbo rates ranging from 6.125 to 6.750 percent on Tuesday. The lower rates are good for home shoppers in Orange County."

Mortgage Bankers Association - "Refinancing Drives Increase In Mortgage Applications In Latest MBA Weekly Survey" (1-23-08)

"The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending January 18, 2008. The Market Composite Index, a measure of mortgage loan application volume, was 981.5, an increase of 8.3 percent on a seasonally adjusted basis from 906.4 one week earlier. On an unadjusted basis, the Index increased 11.0 percent compared with the previous week and was up 63.7 percent compared with the same week one year earlier."

The Washington Post - "Capitalism's Enemies Within" (1-23-08)

"Amid the mayhem on world financial markets, it is becoming clear that capitalism's most dangerous enemies are capitalists. No one can have watched the 'subprime mortgage' debacle without noticing the absurd contrast between the magnitude of the failure and the lavish rewards heaped on those who presided over it. At Merrill Lynch and Citigroup, large losses on subprime securities cost chief executives their jobs -- and they left with multimillion-dollar pay packages. Stanley O'Neal, the ex-head of Merrill, received an estimated $161 million."

The San Diego Union Tribune - "Foreclosures up 353% in S.D. County in 2007" (1-23-08)

"Setting dismal records, home foreclosures more than tripled and notices of mortgage default more than doubled in San Diego County in 2007. DataQuick Information Systems reported yesterday that foreclosures rose 353 percent to 7,349, while default notices – the start of the foreclosure process – increased 128 percent to 20,138. The numbers were the highest since DataQuick began keeping track of county foreclosures in 1988 and defaults in 1992."

Bloomberg - "Bernanke to Cut Rates Further, Faster to Buoy Growth" (1-23-08)

"Federal Reserve Chairman Ben S. Bernanke has decided inflation concerns have faded enough to let him cut interest rates further and faster to keep the U.S. from tipping world economies into recession. The Fed's emergency rate cut yesterday signals a dramatic shift by policy makers from inflation to growth concerns. It indicates they now see a risk of lower home and stock values feeding back into tighter credit conditions that threaten to choke off growth, economists said."

Bloomberg - "10-Year Treasuries Fall as Stocks Recover From Earlier Losses" (1-23-08)

"U.S. 10-year Treasuries fell as stocks recovered from earlier losses, diminishing the appeal of yields at the lowest since 2003. Yields rose as the rebound in equities led traders to trim bets the Federal Reserve will cut its benchmark interest rate next week by as much as three-quarters of a percentage point, after slashing it yesterday between meetings for the first time since 2001. Traders still expect at least a half-point Fed cut."

Bloomberg - "MGIC Drops as Claims Tied to Overdue Mortgages Surge" (1-23-08)

"MGIC Investment Corp., the largest U.S. mortgage insurer, fell the most since it sold shares to the public in 1991 after reporting a sevenfold surge in fourth- quarter claims tied to overdue mortgages. MGIC, based in Milwaukee, declined $4.41, or 28 percent, to $11.64 at 1:15 p.m. in New York Stock Exchange composite trading, making it the worst performer in the Standard and Poor's 500 Index today. The number of delinquent loans MGIC insures rose 18 percent during the final three months of 2007 to 107,120, the company said in a statement late yesterday."

Bloomberg - "U.S. Architects' Index, a Construction Gauge, Rose in December" (1-23-08)

" U.S. architecture firms said billings improved for a third straight month in December, indicating construction of buildings including warehouses, offices and shopping centers will rise for most of this year. The Architecture Billings Index rose to 55.4 last month from 55.3 in November, the Washington-based American Institute of Architects said today in a statement. December's score was the highest since July, when it reached 60. A score above 50 indicates billings increased from the previous month."

Bloomberg - "AIG Bails Out $2.2 Billion Nightingale Finance SIV" (1-23-08)

"AIG follows Citigroup Inc. and HSBC Holdings Plc in financing their SIVs after the collapse of the U.S. subprime mortgage market caused prices of their assets to decline and triggered concern that fire sales would further roil credit markets. SIVs, which use short-term borrowing to invest in higher-yielding securities, have reduced their holdings by more than $100 billion from a peak of $400 billion last year, according to Moody's."

Los Angeles Times - "LA foreclosures by zip code" (1-23-08)

This article includes a map which displays the areas in Los Angeles where foreclosures have increased/decreased the most.

DQNews - "California Foreclosure Activity Still Rising" (1-22-08)

"The number of mortgage default notices filed against California homeowners jumped last quarter to its highest level in more than fifteen years, a real estate information service reported. Lending institutions sent homeowners 81,550 default notices during the October-to-December period. That was up by 12.4 percent from 72,571 the previous quarter, and up 114.6 percent from 37,994 for fourth-quarter 2006, according to DataQuick Information Systems."

NAHB - "NAHB Applauds Fed Rate Cuts; Calls On Congress To Do Its Part" (1-22-08)

"The National Association of Home Builders (NAHB) today applauded the Federal Reserve Board’s aggressive action to cut interest rates by 75 basis points to help jump-start the economy. NAHB also echoed Treasury Secretary Henry Paulson’s comments this morning before the U.S. Chamber of Commerce on the need for Congress to move swiftly to address the current housing situation by enacting the following legislation: FHA modernization to increase the availability of affordable FHA mortgages; comprehensive reform of Fannie Mae and Freddie Mac that allows them to temporarily buy larger home loans in high-cost markets; and allowing cities and states to issue tax-exempt mortgage bonds to refinance existing loans to help troubled borrowers."

NAR - "Statement: NAR Commends Federal Reserve Board on Timely Interest Rate Cut" (1-22-08)

"Today’s 75-basis-point cut in the Fed funds rate to 3.50 percent is a very good step in the right direction to boost the economy and send a clear message to both the market and to consumers. This strong rate cut will help lower mortgage interest rates and lessen the burden of adjustable-rate loans that are resetting in the current environment. It also could help stimulate business investment in the wake of market uncertainties. We commend the Federal Reserve Board on its bold action, but at the same time we urge it to keep a close watch to see if additional action is needed."

Voice of San Diego - "Questioning the Employment Data" (1-22-08)

"San Diego had another pretty good month for job growth, according to data released last week by the California Employment Development Department. Unfortunately, you may not want to believe the numbers."

Bloomberg - "Bank of America Earnings Plummet After Loan Writedown" (1-22-08)

"Bank of America Corp., the second- largest U.S. bank, said earnings dropped 95 percent after $5.28 billion of mortgage-related writedowns and higher provisions for future loan losses. Fourth-quarter net income fell to $268 million, or 5 cents a share, from $5.26 billion, or $1.16, a year earlier, Charlotte, North Carolina-based Bank of America said today in a statement. Excluding merger and restructuring costs and a gain from the sale of Marsico Capital Management LLC, the company earned 5 cents a share, missing the 21-cent average estimate of 21 analysts surveyed by Bloomberg."

Bloomberg - "Ambac Reports Loss, Talks With `Potential Parties'" (1-22-08)

"Ambac Financial Group Inc., the first bond insurer to lose its AAA credit rating because of subprime mortgages, is considering 'strategic alternatives' after posting its biggest-ever loss. The shares jumped 29 percent on optimism the company may be sold. The second-largest bond insurer posted a fourth-quarter net loss of $3.26 billion, or $31.85 a share, after writing down the value of credit-derivatives tied to loans made to homeowners with poor credit by $5.21 billion, according to a statement by the company today."

Bloomberg - "Ambac, MBIA Lust for CDO Returns Undercut AAA Success" (1-22-08)

"The good times are over, and the culprit isn't municipal bonds; it's subprime debt, a market the insurers waded into in pursuit of even greater profits. Some of the biggest bond insurers are facing potential claims that may deplete their capital. Their share prices have plunged, and credit rating companies are scrutinizing their AAA status. Ambac became the first insurer to lose its triple-A rating, when Fitch Ratings downgraded the company to AA on Jan. 18."

Bloomberg - "Ambac's Downgrade Doesn't Mean End of Bond Insurers" (1-22-08)

"Municipal bond insurance is finished. The municipal bond market will crash. These are among the things I heard or read last week after Ambac Financial Group Inc.'s AAA credit rating was lowered by Fitch Ratings to AA. To which I say: Wrong and wrong."

Real Estate Journal - "Home Construction Fell 14% In December to Record Low" (1-22-08)

"Home construction plunged last month to its lowest level in 16 years, as builders cut back and their lenders grew wary amid rising delinquent construction loans. Housing starts plunged 14.2% in December to a seasonally adjusted annual rate of 1.006 million, the slowest pace since 996,000 starts in May 1991. Permits, an indicator of future construction, tumbled 8.1% to a 1.068 million pace, the Commerce Department said."

Real Estate Journal - "Regulators May Want More Bank Transparency" (1-22-08)

"A top bank regulator continued pressing lenders to rework troubled mortgages as the industry reported it had modified the terms of just 28,000 subprime loans in the third quarter. 'Lawmakers at all levels of government...will look to take additional action if foreclosures keep rising and the economic fallout continues,' Federal Deposit Insurance Corp. Chairman Sheila Bair said."

Bloomberg - "ACA Customers Allow More Time to Unwind Default Swaps" (1-21-08)

"ACA Capital Holdings Inc., the bond insurer being run by regulators after subprime-mortgage losses, won a month's grace to unwind $60 billion of credit-default swap contracts that it can't pay. ACA, under the control of the Maryland Insurance Administration, extended an agreement that waives collateral requirements, policy claims and termination rights until Feb. 19, the New York-based company said in a statement on Business Wire late yesterday."

Los Angeles Times - "Paid too much? Sue your agent" (1-21-08)

"You knew it was coming: a potentially trend-setting lawsuit in which buyers who paid too much for their house are now suing their real-estate agent. The New York Times' David Streitfeld reports tonight on a Carlsbad couple who paid $1.2 million for their home in August 2005 only to realize that similar homes in their neighborhood were selling for up to $175,000 less. Naturally, they are suing their agent."

St. Petersburg Times - "A recession touches many hands" (1-21-08)

"Economists are debating the point as conditions deteriorate: Foreclosures, bankruptcy filings and unemployment are rising. Florida reported Friday that the state's jobless rate rose to 4.7 percent last month from 3.3 percent a year ago. Real estate sales and stock prices are tanking. That's the big picture and it's still murky. The little picture is a whole lot clearer. If you've lost your job or your income has fallen, the recession has arrived."

Los Angeles Times - "How we cashed in before the housing crash" (1-20-08)

"Though I would like to claim special powers to read the future, I was really just resisting the market mania of the time. The tech stock bubble was fresh in my mind, as was the early-1990s real estate boom. At the height of our most recent real estate run-up, there was constant talk of new reasons the market would not fall: immigrants, endless demand for scarce land in sunny Southern California and so on."

Los Angeles Times - "Black Tuesday? Update" (1-20-08)

"Good morning. The global stock market sell-off is a story worth tracking, as the U.S. housing slump slowly but surely does damage to investors and economies across the world. Who knew that liar loans and serial refis would end so badly? (I know, I know, you knew). Single-day losses of 5% to 7% in global markets (6.8% in France, 7.2% in Germany, 5.5% in Hong Kong) are eye-opening. U.S. markets, of course, are closed for the King holiday, but futures trading today indicates Tuesday could be very ugly on Wall Street. From Reuters: 'Dow Jones industrial average futures dropped 546 points or 4.5 percent. Should the Dow close lower on Tuesday by the amount the futures suggest, it would rank as the fourth-largest point loss ever for the index.'"

Bloomberg - "Ambac's Insurance Unit Cut to AA From AAA by Fitch Ratings" (1-19-08)

"Ambac Financial Group Inc., the second-largest bond insurer, was stripped of its AAA credit rating by Fitch Ratings after the company abandoned plans to raise new equity. Ambac Assurance Corp. was lowered two levels to AA and may be reduced further, New York-based Fitch said yesterday in a statement. The downgrade 'reflects the significant uncertainty with respect to the company's franchise, business model and strategic direction,' Fitch said."

Bloomberg - "Treasuries Rally as Bush Plan Fails to Ease Recession Concern" (1-19-08)

"Treasuries rose for a fifth straight week, pushing two-year note yields to the lowest since 2004, as President George W. Bush's plan to spur consumer spending failed to ease concern that the economy is falling into recession. Notes maturing in two years yielded 1.90 percentage points below the Federal Reserve's target lending rate, the biggest difference since 1981, as traders bet that the central bank will reduce borrowing costs by at least a half-percentage point. Existing-home sales fell in December to the lowest since records began in 1999, the National Association of Realtors is forecast by economists to report next week."

Santa Cruz Sentinel - "Foreclosure puts local homes on the auction block" (1-18-08)

"Six Santa Cruz County properties will go on the block Feb. 23 in San Mateo. Locations include Aptos, Ben Lomond, Boulder Creek, Santa Cruz and Watsonville. All of these are properties taken back by the lender after foreclosure. Starting bids range from $29,000 for a 320-square-foot cottage, 1513 Jackson Ave., Ben Lomond, to $269,000 for a 1,370-square-foot house at 229 Market St., Santa Cruz."

AZSTARNET.COM - "Tucson '07 new-home spending fell by 25%" (1-18-08)

"Spending on new homes in the Tucson area dropped by more than $567 million in 2007, according to a report by a local housing market consultant. The total amount spent on new homes last year was about $1.67 billion, according to the December Southern Arizona Housing Market Letter from consultant John Strobeck. That was down about 25 percent from the previous year, likely the steepest drop in more than a decade, Strobeck said."

Yahoo - "Paulson Predicts Quick Stimulus Plan" (1-18-08)

"Treasury Secretary Henry Paulson predicted Friday that the administration and Congress can come together quickly to enact a stimulus package that would bring help within weeks to an economy that is threatening to topple into a recession."

Yahoo - "Tax rebates: Where's your check" (1-18-08)

"Consumers fuel the economy and if they're strapped, the thinking goes, better get them some cash to spend. The biggest component of any government plan to jump-start the economy is expected to be issuing tax rebate checks - both Republicans and Democrats are pushing the idea of sending out checks for several hundred dollars if not more."

The Washington Post - "Dire Year on Wall Street Yields Gigantic Bonuses" (1-18-08)

"Wall Street's five biggest firms together paid a record $39 billion in bonuses, even though three of them suffered the worst quarterly losses in their history and shareholders lost more than $80 billion. Goldman Sachs Group, Morgan Stanley, Merrill Lynch, Lehman Brothers Holdings and Bear Stearns together paid $65.6 billion in compensation and benefits last year to their 186,000 employees. Year-end bonuses usually account for 60 percent of the total, meaning bonuses exceeded the $36 billion distributed in 2006 when the industry reported all-time high profits."

Market Watch - "Bush calls for 'direct and rapid' stimulus" (1-18-08)

"A key part of the White House's plan involves income-tax relief but leaves out breaks on payroll taxes paid by poorer Americans. Washington's 2001 rebate was an income-tax rebate, not a payroll-tax rebate. That plan included rebates of either $300 or $600. This time the biggest rebates could reportedly be more than double those. The package should be equal to about 1% of gross domestic product, Bush said, which would be about $140 billion for a full year. Bush said that there's a risk of an economic downturn but that the White House expects the economy to continue to grow, echoing a view expressed by Federal Reserve Chairman Ben Bernanke in Capitol Hill testimony Thursday."

Bloomberg - "Sallie Mae to Cut 350 Jobs, Aims to Reduce Costs" (1-18-08)

"SLM Corp., the largest U.S. college- loan provider, is eliminating 350 jobs and seeks to cut 20 percent of its operating expenses to combat rising borrowing costs and shrinking federal subsidies to lenders. The workforce reduction equals about 3 percent of the lender's 11,000 employees, with layoffs in 26 locations, including the Reston, Virginia, headquarters, spokesman Tom Joyce said today in a phone interview. Earlier today, the Washington Post reported the job cuts and the company's plans to reduce operating costs by 20 percent by 2010."

Bloomberg - "Commercial-Mortgage-Bond Protection Costs Surge to New Records" (1-18-08)

"The cost of protection against defaults on commercial-mortgage-backed securities ended this week at records after Fitch Ratings tightened standards and some borrowers were unable to make their payments. A Markit CMBX index of credit-default swaps tied to 25 bonds rated AAA when created in mid-2007 surged to 122.19 basis points, or 45 percent higher than Jan. 11, according to Markit Group Ltd. The CMBX-NA-BBB- 4 index, tied to bonds with the lowest investment-grade ratings and backed by the same loan pools, jumped 26 percent to 1,564 basis points."

Los Angeles Times - "How I beat the bubble: Confessions of a market-timer" (1-18-08)

"Excellent piece of pre-weekend reading: LA Times real estate reporter Peter Hong's story of how he bailed out of the housing bubble in 2005. It starts off like this: 'Our friends said we were crazy. Relatives asked whether we were in financial trouble. But in April 2005, my wife and I bailed out of the American dream. We sold our two-bedroom Pasadena condominium and became renters again.'"

NAR - "Stimulus Package Must Include Loan Limit Increase to Help Homeowners, Economy Immediately, Says NAR " (1-17-08)

"The National Association of Realtors® today urged President George W. Bush and Congress to help homeowners and the national economy by loosening constraints on Fannie Mae and Freddie Mac as an integral part of a federal stimulus package currently being discussed."

DQNews - "California December 2007 Home Sales" (1-17-08)

"A total of 25,585 new and resale houses and condos were sold statewide last month. That's virtually unchanged from 25,578 for November, and down 41.1 percent from 43,431 for November 2006. Last month's sales made for the slowest December in DataQuick's records, which go back to 1988. On a year-over-year basis, sales have declined the last 27 months."

Mortgage Bankers Association - "MBA Study: Industry Initiated More Than 235,000 Loan Modifications and Repayment Plans in 3rd Quarter" (1-17-08)

"The mortgage industry modified an estimated 54,000 loans and established formal repayment plans with another 183,000 borrowers during the third quarter of 2007, according to a report issued today by the Mortgage Bankers Association. By comparison, foreclosure actions were started on approximately 384,000 loans, but of those foreclosures, 63 percent were cases where the borrower did not live in the home, the borrower did not respond to repeated attempts by the lender to contact them, or where the borrower failed to perform on a repayment plan or loan modification that was already in place."

NAHB - "Builders Continue To Reduce New Housing Production In December" (1-17-08)

"Single-family housing starts declined 2.9 percent to a seasonally adjusted annual rate of 794,000 units in December as home builders continued to ratchet down production in an effort to reduce inventories of new homes on the market, according to newly released data from the U.S. Commerce Department. Meanwhile, a sharp reduction in the volatile multifamily sector contributed to an overall 14.2 percent decline in nationwide housing starts for the month to a one million-unit rate, the lowest since May of 1991."

Bloomberg - "Merrill Posts Record Loss on $16.7 Billion Writedown" (1-17-08)

"Merrill Lynch & Co., the biggest U.S. brokerage, reported a record loss after $16.7 billion of writedowns on assets infected by subprime mortgages. The fourth-quarter net loss of $9.83 billion, or $12.01 a share, compared with earnings of $2.35 billion, or $2.41, a year earlier, the New York-based firm said today in a statement. The loss was almost three times bigger than analysts estimated and resulted in the first full-year loss since 1989, sending Merrill down 10 percent in New York trading, the biggest decline since the 2001 terrorist attacks."

Bloomberg - "CIT Posts Loss on Mortgages, Will Cut 5% of Workforce" (1-17-08)

"CIT Group Inc., the largest independent commercial finance company in the U.S., reported a fourth-quarter loss because of bad home mortgages and the declining value of its student-loan business. The $123.2 million loss before preferred dividends, or 69 cents a share, compares with a profit of $266.8 million, or $1.31 a share, a year earlier, the New York-based company said today in a statement. The full-year loss was $81 million, or 58 cents a share, compared with a profit of $1.05 billion in 2006."

Bloomberg - "Moody's, S&P Reviewing Bond Insurers as Losses Mount" (1-17-08)

"Moody's Investors Service and Standard & Poor's increased their scrutiny of bond insurers after losses on subprime-mortgage securities prompted Ambac Financial Group Inc. to report writedowns of $3.5 billion. Ambac and MBIA dropped in early New York Stock Exchange trading and their risk of default soared after Moody's said it may cut Ambac's AAA credit rating. S&P yesterday began examining all bond insurers after increasing its predictions for losses on subprime mortgages. Shares of Ambac plunged $8.01, or 62 percent, to $4.96 as of 9:48 a.m. in New York Stock Exchange composite trading. MBIA shares dropped $4.57, or 34 percent, to $8.83."

Market Watch - "Wall Street's error-oids era" (1-17-08)

"This week three major banks are scheduled to testify. Through Wednesday, Citigroup Inc. and J.P. Morgan Chase & Co. had 'fessed up. Another, Merrill Lynch & Co. is expected to come clean with billions more in write-downs. Ballplayers have ruined their bodies and reputations and often forced themselves into an early retirement for the sake of RBI and ERA. Banks ruined their balance sheets and market values for the sake of SIVs and MBSs."

CNN - "WaMu accused of appraisal fraud" (1-17-08)

"A former real estate appraiser for Washington Mutual is suing the bank, claiming she was blacklisted last year for providing a housing market forecast that was too gloomy. Jeniffer Wertz, who is seeking unspecified damages, says WaMu stopped accepting her appraisals in mid-2007 a month after she reported that her local housing market in California was 'declining.'"

NAHB - "Builder Confidence Virtually Unchanged In January" (1-16-08)

"Builder confidence in the market for new single-family homes was virtually unchanged for a fourth consecutive month in January as mortgage-market problems and inventory issues continued to pose challenges, according to the latest NAHB/Wells Fargo Housing Market Index (HMI), released today. The HMI rose a single point to 19 this month following a downwardly revised 18 reading in December and 19 readings in both October and November of 2007."

Mortgage Banker Association - "Federal Housing Finance Board Approves Affordable Housing Program Waiver" (1-16-08)

"The Board of Directors of the Federal Housing Finance Board (Finance Board) passed a resolution permitting the Federal Home Loan Bank of San Francisco to develop a pilot program to use a portion of its Affordable Housing Program (AHP) homeownership set-aside allocation to assist low- and moderate-income households that, as a result of a recent or scheduled increase in monthly mortgage payments, will no longer be able to afford their mortgages. The Bank’s program, known as the Homeownership Preservation Subsidy (HPS), will replace the household’s non-traditional or subprime mortgage with a fixed-rate, fully-amortizing, 30 year mortgage at a market or below-market interest rate."

Mortgage Bankers Association - "Press Release - Weekly Application Survey" (1-16-08)

"The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending January 11, 2008. The Market Composite Index, a measure of mortgage loan application volume, was 906.4, an increase of 28.4 percent on a seasonally adjusted basis from 706.0 one week earlier. On an unadjusted basis, the Index increased 64.8 percent compared with the previous week which was shortened by the New Year’s holiday and was up 39.0 percent compared with the same week one year earlier."

Bloomberg - "Regional U.S. Banks May Report Record Drop in Profit" (1-16-08)

"Regions Financial Corp., Capital One Financial Corp. and PNC Financial Services Group Inc. may say bad loans spread to auto, consumer and commercial finance from mortgages, resulting in a record earnings decline for regional U.S. banks. Fourth-quarter earnings per share at the seven biggest regional banks probably dropped an unprecedented 66 percent, according to Sandler O'Neill & Partners research director Mark Fitzgibbon. It may be 'the mother of all kitchen-sink quarters' as banks pile on as many write-offs as possible to ensure that few or none occur this year, he said."

CNN - "Dollar tumbles to 2-1/2 year low vs. yen" (1-16-08)

"The dollar sank to a 2 1/2- year low against the yen Wednesday in Asia as investors sold the greenback due to concerns over the U.S. economy and financial system. The dollar was trading at ¥105.98 at midafternoon Wednesday, down from ¥107.07 late Tuesday in New York and hitting the lowest levels since May 2005. The euro rose to $1.4842 from $1.4833."

The San Diego Union Tribune - "Citigroup woes fuel fears for economy" (1-16-08)

"Citigroup, the nation's largest bank, reported a staggering fourth-quarter loss of $9.83 billion yesterday and issued a sobering forecast that the housing market and the broader economy still had not bottomed out. To shore up their financial condition, Citigroup and Merrill Lynch, which also has been rocked by the subprime mortgage debacle, were forced again to go hat in hand for cash infusions from investors in the United States, Asia and the Middle East, for a combined total of nearly $19.1 billion."

Bloomberg - "Ambac Will Cut Dividend, Raise $1 Billion in Capital" (1-16-08)

"Ambac Financial Group Inc. replaced its chief executive officer, slashed the dividend 67 percent and will raise more than $1 billion to preserve its AAA credit rating after announcing the biggest-ever writedowns by a bond insurer. Ambac, the second-largest insurer of municipal and structured finance debt, fell the most ever on the New York Stock Exchange, extending a 76 percent decline from the past 12 months. Ambac will report a loss after reducing the value of securities it guarantees by $3.5 billion, according to a statement today."

The New York Sun - "High Court Decision Could Protect Subprime Players" (1-16-08)

"A decision by the U.S. Supreme Court could make it more difficult for investors to sue over the collapse of the subprime mortgage market. Yesterday's ruling puts strict limitations on when lawyers, accountants, and other professionals can be sued in securities fraud cases. The 5-3 decision in Stoneridge Investment Partners v. Scientific-Atlanta Inc. means that in many lawsuits over stock prices, only the "primary violators" of the alleged fraud can be sued. The court said private plaintiffs couldn't bring such suits against defendants for "aiding and abetting" fraudulent bookkeeping."

Bloomberg - "JPMorgan Net Falls; Writedown Smaller Than Estimated" (1-16-08)

"JPMorgan Chase & Co., the third- biggest U.S. bank by assets, said profit dropped 34 percent on subprime-mortgage writedowns and higher costs for future loan defaults. Fourth-quarter net income declined to $2.97 billion, or 86 cents a share, from $4.53 billion, or $1.26, a year earlier, the New York-based bank said today in a statement. JPMorgan rose 5.8 percent in New York trading as the $1.3 billion writedown was smaller than analysts estimated and the company reported higher earnings from consumer banking, credit cards and asset management."

Bloomberg - "HSBC Stock Drop in Hong Kong Is Biggest Since 2001" (1-16-08)

"HSBC Holdings Plc, Europe's biggest bank by market value, dropped the most in six years in Hong Kong trading on concern it may have to increase provisions for U.S. bad loans after Citigroup Inc. reported a record loss. HSBC declined 4.8 percent to HK$115, the lowest since August 2004. The decline came as Hong Kong's benchmark Hang Seng Index slumped 5.4 percent, the biggest drop since the Sept. 11, 2001, terrorist attacks on the U.S."

Los Angeles Times - "California briefs" (1-16-08)

"A developer who had proposed a large hotel-condominium complex in the resort district confirmed Tuesday that he is pulling out of the project because of a weak housing and hotel market and the pressure of a looming Disney-backed ballot initiative."

Real Estate Journal - "Wall Street Trader Paulson Made Billions on Subprime" (1-16-08)

"On Wall Street, the losers in the collapse of the housing market are legion. The biggest winner looks to be John Paulson, a little-known hedge fund manager who smelled trouble two years ago. Funds he runs were up $15 billion in 2007 on a spectacularly successful bet against the housing market. Mr. Paulson has reaped an estimated $3 billion to $4 billion for himself -- believed to be the largest one-year payday in Wall Street history."

CBIA - "California New Home Market Still Struggling, CBIA Announces" (1-15-08)

"The pace of home sales at California new-home communities in November continued to be dramatically lower than it was a year ago, the California Building Industry Association reported today. The monthly CBIA/Hanley Wood Market Intelligence (HWMI) New Home Sales and Pricing Report showed that new home sales in November were nearly 55 percent below sales in November 2006, down from the 46 percent year-over-year decline seen in October."

DQNews - "Continued nose-dive for Southland home sales" (1-15-08)

"The remarkably low level of home sales in Southern California persisted last month as sellers, buyers and lending institutions continued to hold their collective breath amid market turmoil. A total of 13,240 new and resale houses and condos were sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties in December. That was up 0.5 percent from 13,173 for the previous month, and down 45.3 percent from 24,209 for December last year, according to DataQuick Information Systems"

Mortgage Bankers Association - "MBA’s “Stop the Cram Down Resource Center” Puts a Price Tag on Bankruptcy Reform" (1-15-08)

"A proposed change in the bankruptcy law that would allow bankruptcy judges to unilaterally change the terms of mortgage contracts would cost home buyers across the country hundreds of dollars every month and thousands of dollars a year, according to a new resource on MBA’s website: www.mortgagebankers.org/stopthecramdown."

The San Diego Union Tribune - "Consumers hit brakes on spending" (1-15-08)

"More evidence of a dramatic slowdown in consumer spending surfaced yesterday, as Sears Holdings warned that a drop in sales would result in a profit shortfall and the world's largest retail trade group issued a downbeat sales forecast for 2008. Consumer spending, which accounts for two-thirds of the nation's economic activity, had been showing resilience even as gas prices rose and the housing market fell. But recent data point to a sharper pullback, a trend that may tip the economy into recession."

Reuters - "Greenspan to join New York hedge fund firm" (1-15-08)

"Former Federal Reserve Chairman Alan Greenspan is set to join hedge-fund firm Paulson & Co. as an adviser, The Wall Street Journal reported on Tuesday. New York-based Paulson, with assets of $28 billion, is set to make the announcement on Tuesday, the report said. Greenspan has been criticized by some for keeping the trendsetting federal funds rate at a low 1 percent from June 2003 through June 2004, which some say contributed to a housing bubble that is now bursting."

Market Watch - "This is not your father's recession" (1-15-08)

"In the past, when the U.S. economy ran into trouble, there were tried and true remedies that policymakers could implement in order to turn things around. The Federal Reserve would swing into action by cutting interest rates and injecting additional liquidity into the banking system. Then, with a lag traceable only to the normal workings of the political process, the Congress and the president would join in by cutting taxes and increasing government spending. And on those rare occasions when this softness would occur in a year divisible by four (a presidential election year), the political process would miraculously go into overdrive, since it became a question of saving one's own political skin as well."

Orange County Register - "A really tough year for O.C. housing" (1-15-08)

"'We've never had a period of time where the momentum for sales just stopped,' said Bob Chapman, past president of the Newport Beach Association of Realtors. The mortgage market was the engine for the selling market, Chapman said. In 2007, the engine stopped running."

Los Angeles Times - "Home sales seen bottoming in '08" (1-15-08)

"U.S. existing-home sales will reach a bottom in 2008 as buyers find it tougher to get mortgages, according to a forecast by the Mortgage Bankers Assn., the industry's largest trade group. Sales of previously owned homes probably will drop to an 11-year low of 4.94 million from 5.68 million last year and then increase to 5.12 million in 2009, the Washington-based group said Monday. New-home sales are likely to tumble 15% this year to 666,000 before rising 6.6% in 2009."

Orange County Register - "Orange County home prices and sales, December" (1-15-08)

"For December, sales for all types of Orange County home decreased 42 percent. The median sales price decreased 10.3 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."

Mortgage Bankers Association - "OFHEO Releases Report About The Conforming Loan Limit And High-Cost Areas" (1-14-08)

"The Office of Federal Housing Enterprise Oversight (OFHEO) has published a new Mortgage Market Note on the conforming loan limit. The Note provides background information on the potential implications of increasing the conforming loan limit in high-cost areas, as proposed in pending House and Senate legislation. The Note describes the jumbo mortgage market and the potential impact of a higher conforming loan limit on mortgage borrowers and on Fannie Mae and Freddie Mac."

Mortgage Bankers Association - "Slow Economic Growth in 2008 Will Be Coupled With Lower Levels of Mortgage Originations in 2008 and 2009" (1-14-08)

"The Mortgage Bankers Association (MBA) projects that economic growth will continue to slow through the first half of 2008, but expects economic activity will begin to pick up in the second half of 2008 and resume trend-like growth toward the end of 2009. Total mortgage production will be down 16 percent to $1.96 trillion this year from a projected $2.34 trillion in 2007. Total originations should see a further drop of four percent in 2009 to $1.88 trillion."

NAR - "NAR Campaign Relates Real Facts About Real Estate" (1-14-08)

"Over the past 30 years, the median price of existing homes has increased an average of more than 6 percent every year, and home values nearly double every 10 years, according to historical data from NAR’s existing-home sales series. A Federal Reserve study has shown that the average homeowner's net worth is 46 times the net worth of the average renter. Despite this and other research, some potential home buyers are being kept on the sidelines as they react to national media reports about the housing market. "

Boston - "Obama unveils $120-billion plan to fuel economy, stem foreclosures" (1-14-08)

"Barack Obama yesterday unveiled an economic stimulus package costing up to $120 billion that his campaign said would put money in the hands of workers and seniors, stem the foreclosure crisis, and cover state budget shortfalls. The Illinois senator is proposing that the plan be implemented before a new president takes office."

Bloomberg - "Dollar Falls to Within a Cent of Euro Record on Bets Fed to Cut" (1-14-08)

"The dollar fell to within a cent of its all-time low versus the euro on speculation U.S. interest rates will drop below those of the 15 nations that share the single European currency for the first time in three years. The U.S. currency extended three weeks of declines as Federal Reserve officials including Chairman Ben S. Bernanke signaled last week they favor greater 'insurance' against an economic slowdown amid the slump in the housing market. European Central Bank council member Klaus Liebscher said today he sees 'significant' upside risks to inflation."

Bloomberg - "Money-Market Rates in Dollars Drop Before Fed Auction" (1-14-08)

"The cost of borrowing dollars fell the most in four months before a $30 billion auction by the Federal Reserve as the logjam in money markets caused by the collapse of the U.S. subprime-mortgage market eases. The three-month London interbank offered rate, or Libor, for dollars declined 20 basis points to 4.06 percent, the British Bankers' Association said today. The decline is the biggest since Sept. 19, the day after the Fed lowered its benchmark interest rate a half percentage point. Euro and pound rates also dropped."

Bloomberg - "Gold, Platinum Rise to Record as Dollar Falls; Crop Prices Gain" (1-14-08)

"The dollar fell as traders increased bets that the Federal Reserve will lower U.S. interest rates to avoid a recession. Gold has gained 8.3 percent this year and the dollar has fallen more than 1.9 percent against the euro, to a seven-week low. Oil and base metals such as copper also rose, lifting the UBS Bloomberg Constant Maturity Commodity Index to the highest ever."

Bloomberg - "Wall Street's $35 Billion Writedown Squeezes Profits" (1-14-08)

"Citigroup Inc., Bank of America Corp. and Merrill Lynch & Co. may report their worst-ever quarter, beset by $35 billion of writedowns that threaten to crimp profit through 2008. The losses have depleted the banks' capital, forcing New York-based Citigroup and Merrill to seek more than $13 billion from foreign investors, and hobbled their ability to make new loans. Other sources of fees, including credit cards, are also in jeopardy as the U.S. economy slows, said CreditSights Inc. analyst David Hendler, who estimates Citigroup, Bank of America and Merrill won't earn more this year than they did in 2006."

Bloomberg - "Bernanke Signals Deeper Rate Cuts, Emphasizes Growth" (1-14-08)

"Federal Reserve Chairman Ben S. Bernanke signaled he has resolved months of debate over the competing risks of slower growth and faster inflation, and is ready to make deeper interest-rate cuts. Bernanke yesterday pledged 'substantive additional action' to insure against 'downside risks' to the six-year economic expansion. His remarks in a Washington speech led HSBC Securities USA Inc. and Morgan Stanley to predict the Fed will reduce its benchmark rate by half a percentage point this month, up from their previous forecast of a quarter point."

Bloomberg - "Mortgage-Rate Reset Doesn't Need to Be a Crisis" (1-14-08)

"This will be a brave new year for U.S. homeowners with adjustable-rate loans. Terms will be tougher for the credit-challenged. Fewer bargain teaser rates will be offered. And for those facing higher resets on adjustable-rate mortgage payments, it's time to negotiate. If your mortgage is ratcheting up to a monthly payment you can't afford, you may have some leverage in lowering the rate. Your lender may even welcome the move and allow you to do a low- cost loan modification."

Yahoo - "Citigroup May Write Down As Much As $24 Billion" (1-14-08)

"Citigroup could write down as much as $24 billion due to subprime and credit-related losses, CNBC has learned. In addition, the company could lay off as many as 20,000 workers as part of a comprehensive plan to slash costs and raise capital."

Yahoo - "States Probe Banks' Role in Risky Loans" (1-12-08)

"Authorities in New York and Connecticut are investigating whether Wall Street banks hid crucial information about high-risk loans bundled into securities that were sold to investors, Connecticut's Attorney General said Saturday."

Washington Post - "Stretching Old Formulas Can Take You to the Edge" (1-13-08)

"For most people, a home is the most expensive purchase they will ever make. Figuring out how much they should spend can be overwhelming. Online calculators can give a ballpark idea of how much you can afford, but you shouldn't rely on them to make your final decision, said Paul Cocozza, a certified financial planner in Arlington. 'To me, that's taking too much of a shortcut for such a large commitment.'"

Reuters - "Unusual trades in Countrywide calls raise eyebrows" (1-11-08)

"Unusual call trading in Countrywide Financial Corp on Thursday before news that Bank of America Corp was in talks to buy it has some option players asking if word of a pending deal had leaked to the market. About 304,000 calls compared with 248,000 puts traded in Countrywide, a combined volume five times its normal level, according to market research firm Trade Alert."

Bloomberg -"Central Banks Dance in Denial on Stagflation" (1-11-08)

"There's inflation and there's deflation. Both are bad, especially in excess, though stagflation -- defined as no or slow economic growth combined with a rising inflation rate -- holds a special place in the darker recesses of the dismal science's pantheon, not the least because of the dilemma it poses for central banks. 'Cutting interest rates to prevent a recession could stoke inflation pressures further,' says Joachim Fels, London-based co-chief global economist at Morgan Stanley. 'Conversely, raising rates or keeping them unchanged could push the economy over the brink.'"

The San Diego Union Tribune - "Governor proposes 10% cut in spending across the board" (1-11-08)

"Gov. Arnold Schwarzenegger's proposal yesterday for a $141 billion state budget with deep cuts was met with fear that 100,000 teachers may lose their jobs and suspicion that it's a ploy to get budget reform. Schwarzenegger insisted tax increases would not be part of the mix, reminding reporters that he pledged not to raise taxes when he took office in 2004."

The San Diego Union Tribune - "Bernanke indicates rate cuts coming" (1-11-08)

"Presenting a bleak picture of a deteriorating national economy, Federal Reserve Chairman Ben S. Bernanke strongly suggested yesterday that the Fed would cut interest rates soon, perhaps by a large amount."

The San Diego Union Tribune - "Holiday shopping season was worst in five years" (1-11-08)

"The weakest holiday shopping season in five years ended dismally for most retailers, whose sales tumbled despite deep discounts and extended store hours, stoking fears that the economy is tipping into a recession. Sales fell across the board, knocking down once-seemingly invincible chains such as Target (down 5 percent compared with last year), Abercrombie & Fitch (2 percent), Nordstrom (4 percent) and Kohl's (11.4 percent)."

Yahoo - "Novastar Cutting 85 Percent of Jobs" (1-11-08)

"Mortgage lender NovaStar Financial Inc. announced Friday it was eliminating about 170 jobs, or 85 percent of its work force, a move tied to the company closing its retail and brokerage lending operations."

Bloomberg - "LBO Firms Reduce Banking Fees as Takeovers Dry Up" (1-11-08)

"The decline in leveraged buyouts is slashing fees for investment banks, including Deutsche Bank AG and JPMorgan Chase & Co., by about 50 percent. Buyout firms paid $5.4 billion to securities firms in the U.S. and Europe in the second half of 2007, 38 percent less than the first six months, data compiled by New York-based research firm Freeman & Co. and Thomson Financial show. The drop was steepest in Europe, where fees fell 54 percent."

Yahoo - "What $1 Million Buys in Homes Worldwide" (1-11-08)

"Home prices in many parts of the world swelled last year, with Eastern European and Scandinavian markets leading the way with double-digit growth. The result? On foreign soil, $1 million buys less than ever. In London, it'll get you a one-bedroom, one-bathroom flat in Primrose Gardens. You'll save on cabs, however; the building is steps from the Belsize Park tube station. In Hong Kong, $1 million buys a three-bedroom, 825-square-foot apartment in a high-rise between the residential areas of Aberdeen and Pokfulam."

Business Week - "ARMs Aren't Always Behind Foreclosures" (1-11-08)

"It's no coincidence that states with the largest shares of adjustable-rate mortgages—Nevada, California, Arizona, Florida, and Colorado—are also among the states with the highest levels of foreclosures. The link between ARM concentrations and foreclosures has become increasingly apparent in the year or so since the subprime loans that originated at the top of the market started resetting. But just because a state has a low exposure to ARMs doesn't mean it is immune to high foreclosure rates. Take Texas, for example. Home prices in the Lone Star State are low and, as of November, 2007, only about 12% of mortgages were ARMs. But it ranked 14th in the nation for foreclosures, with a rate of one filing per 778 households."

CNN - "Countrywide borrowers: Fear not" (1-11-08)

"Marks suggested that Bank of America will be able to help current Countrywide customers where Countrywide can't, because it doesn't give risky subprime mortgages, so it plans to convert them into prime loans."

Financial Times - "Clothing retailers cut their earnings forecasts" (1-10-08)

"American Eagle, the youth clothing chain, and Men's Wearhouse, which specialises in business suits, both cut their fourth-quarter earnings guidance yesterday - presaging what is expected to be a round of grim December sales figures today from other leading US retailers."

Kren - "As Housing Slumps, Real Estate Agents Quit the Business" (1-10-08)

"As many train for new careers, return to old ones, or wait tables until prices rebound, the plight of the real estate agent - average age, 51 - reveals the human dimension of how loose lending, raw opportunity, and self-determination produced a housing bust that has stunned the U. S. economy. 'They've tasted success and big money, and now their standard of living has been rocked and reality has set in,' says John Baen, a real estate professor at the University of North Texas in Denton. 'The whole [economy] has been built on real estate. When the music stops, what is left?'"

CNN - "Bank of America's Countrywide trap" (1-10-08)

"Late last summer, Bank of America and its deal-hungry chief Kenneth Lewis won kudos for a $2 billion investment in Countrywide Financial, the once high-flying mortgage lender hit hard by the housing slump. In one stroke, Lewis erased his reputation as a serial over-payer with the kind of convertible preferred stock deal that arbitrage traders dream of. In exchange for its $2 billion, Bank of America secured the right to buy Countrywide stock at $18, a tidy 21 percent discount over the price at the time. Lewis, it seemed, had deftly locked in an instant $424 million profit for the bank."

CNN - "Will foreclosures spark an arson boom?" (1-10-08)

"With the national foreclosure rate zooming and the real estate market in a two-year funk, the insurance industry fears more homeowners will see arson as a way out of their financial woes. A recent report by the industry-funded Coalition Against Insurance Fraud notes that with 'untold thousands of homeowners struggling with ballooning subprime mortgage payments, fraud fighters are watching closely for a spike in arsons by desperate homeowners who can no longer afford their home payments.'"

Yahoo - "Chair: Fed Willing to Cut Interest Rates" (1-10-08)

"Federal Reserve Chairman Ben Bernanke pledged Thursday to slash interest rates as needed to prevent housing and credit problems from plunging the country into a recession. The Fed chief made clear the central bank was prepared to act aggressively to rescue a weakening economy. 'We stand ready to take substantive additional action as needed to support growth and to provide adequate insurance against downside risks,' he said."

CNN - "Housing: No room for bulls" (1-10-08)

"Even a few months ago, it seemed like a good idea to hold a debate between real estate bulls and bears. But with home sales spiraling and the outlook getting gloomier, it was hard to find a single optimist at a recent panel discussion on the forecast for the housing market."

Bloomberg - "Greenspan's Reputation at Risk as Recession Odds Grow" (1-10-08)

"The next bubble to deflate may be Alan Greenspan's reputation. Hailed as perhaps the greatest central banker who ever lived when he left the Federal Reserve in 2006, Greenspan is under attack from critics ranging from the New York Times to economists at the American Enterprise Institute for his handling of the 2000-2005 housing boom. The former Fed chairman has taken to the media to defend himself, writing in the Wall Street Journal and appearing on network television."

Bloomberg - "Lennar's New Homes Fetch 60% Less as U.S. Market Slump Deepens" (1-10-08)

"Lennar Corp.'s November sale of 11,000 properties in eight states set a price that may mark the bottom for the U.S. housing market: 40 cents on the dollar. That's how much Morgan Stanley Real Estate paid for an 80 percent stake in the 32 communities, 60 percent less than the price at which the properties were valued just two months earlier. That's also what some investors say they would pay for distressed land, condominiums, homes and whole developments, whether it's now or later this year."

Bloomberg - "The Fed's Message Is Getting Lost in Translation" (1-10-08)

"While the Fed took a pass on a formal assessment of the balance of risks, the impression was one of equal and offsetting concerns about weaker growth and higher inflation. It was a surprise, then, to see the compendium of downbeat assessments and degree of institutional angst in the minutes, made public on Jan. 2. Almost everything -- housing, mortgage finance, credit conditions, bank balance sheets, consumer and business sentiment and spending -- was worse or weaker than previously expected. Exports were the only bright light. Market expectations for more aggressive rate cuts took a giant leap forward following the release of the minutes and subsequent data showing weak manufacturing and job growth."

Los Angeles Times - "Countrywide 'on a collision course with bankruptcy'" (1-10-08)

"The LA Times this morning quotes Weiss Research, which rates the condition of lenders, as saying Countrywide Financial 'is on a collision course with bankruptcy,' adding that it 'exhausted many of its extraordinary financing options last year and is ill-prepared for the rising mortgage defaults and home foreclosures that are widely expected this year.'"

Real Estate Journal - "Home Builders Shrink the Choices For Carpet, Counters to Save Cash" (1-10-08)

"The nation's second-largest home builder is whittling down options and moving toward a one-faucet-fits-similar-price-points model, seeing standardization and simplification as tools in a cost-cutting drive aimed at saving millions of dollars and surviving the housing slump. Other home builders are taking similar steps. Beazer Homes USA Inc. says it reduced its carpet offerings by 85%. Pulte Homes Inc. cut back to 400 floor plans from more than 2,000, and Centex Corp. cut its roughly 4,500 plans in half, with more reductions under way."

Mortgage Bankers Association - "Fed Requests Comments on Proposed Changes to Truth in Lending (Reg Z)" (1-9-08)

"The Board proposes to amend Regulation Z, which implements the Truth in Lending Act and Home Ownership and Equity Protection Act. The goals of the amendments are to protect consumers in the mortgage market from unfair, abusive, or deceptive lending and servicing practices while preserving responsible lending and sustainable homeownership; ensure that advertisements for mortgage loans provide accurate and balanced information and do not contain misleading or deceptive representations; and provide consumers transaction-specific disclosures early enough to use while shopping for a mortgage. The proposed revisions would apply four protections to a newly-defined category of higher-priced mortgage loans secured by a consumer's principal dwelling, including a prohibition on a pattern or practice of lending based on the collateral without regard to consumers' ability to repay their obligations from income, or from other sources besides the collateral."

Mortgage Bankers Association - "Refi Apps Jump as Rates Decline In Latest MBA Weekly Survey" (1-9-08)

"The Refinance Index increased 53.9 percent to 2494.2 from 1620.9 the previous week and the seasonally adjusted Purchase Index increased 14.7 percent to 414.0 from 360.8 one week earlier. On an unadjusted basis, the Purchase Index increased 56.2 percent to 251.8 from 161.2 the previous week. The seasonally adjusted Conventional Index increased 34.1 percent to 1015.3 from 757.4 the previous week, and the seasonally adjusted Government Index increased 18.2 percent to 190.4 from 161.1 the previous week."

Yahoo - "Countrywide says foreclosures highest on record" (1-9-08)

"Countrywide Financial Corp, the largest U.S. mortgage lender, said on Wednesday that foreclosures and late payments rose in December to the highest on record, sending its shares tumbling for a second day to their lowest in nearly 13 years. The shares closed down 43 cents, or 7.7 percent, at $5.12, bringing their two-day decline to 33 percent. They earlier fell to $4.43, a level not seen since April 1995."

Orange County Register - "Costs rise on home loans" (1-9-08)

"Folks shopping for a home loan are likely to face higher fees this year, especially if they have even a minor ding on their credit record. Lenders already have raised their consumer prices to reflect fee increases they must pay to Fannie Mae, the largest U.S. funder of home loans, and Freddie Macbeginning in March."

Business Week - "Housing: A Fresh Jolt of Bad News" (1-9-08)

"In case you were still harboring a tiny bit of optimism about the U.S. housing sector, just take a look at a couple of headlines from Jan. 8. KB Home (KBH) President and Chief Executive Officer Jeffrey Mezger said in a conference call with investors that he sees "no sign" that the sinking housing market is stabilizing in 2008, after announcing a staggering $9.99 loss per share in the last quarter of 2007."

Market Watch - "'Shortsighted' investment pros blew it: Poole" (1-9-08)

"Investment professionals' 'shortsightedness' led them to make fundamental errors that led to the mortgage crisis and credit meltdown, St. Louis Federal Reserve President William Poole said Wednesday. In a speech to financial planners, Poole detailed five key mistakes that borrowers and lenders made that have pushed the economy to the brink of recession."

Bloomberg - "U.S. Will Escape Recession, Economists Say in Survey" (1-9-08)

"The U.S. will skirt recession as consumer spending slows without collapsing, a survey of economists showed. Economic growth will average 1.5 percent in the first six months of 2008, matching the fourth quarter's pace, according to the median estimate of 62 economists surveyed by Bloomberg News from Jan. 3 to Jan. 8. The rate of expansion would be the weakest since the last nine months of 2001."

Real Estate Journal - "Will More HomeownersGet Help With Rates?" (1-9-08)

"Treasury Secretary Henry Paulson suggested the mortgage industry should consider greatly expanding its White House-backed program to ease loan terms for millions of financially troubled homeowners whose mortgages are due to rise. Mr. Paulson's remarks yesterday mark the first time the Bush administration has hinted that the plan to expedite refinancing or freeze interest rates for cash-strapped subprime borrowers should also target homeowners who took out other kinds of adjustable-rate loans."

NAR - "Stable Existing-Home Sales Expected in Early 2008, then Gradual Rise" (1-8-08)

"Over the next few months, existing-home sales are expected to hold fairly steady as indicated by pending sales activity, then rise later in the year and continue to improve in 2009, according to the latest forecast by the National Association of Realtors®."

Reuters - "KB Home posts loss, sees tough '08 for industry" (1-8-08)

"KB Home posted a quarterly loss of nearly $773 million on Tuesday, including charges for shrinking land values and abandoned projects, as the U.S. housing market braced for another rough year in 2008. KB Home, whose shares fell as much as 9.8 percent to a six-year low before regaining some ground, also said it expects to reach an agreement with bank partners to ease its credit arrangements by the end of the first quarter of 2008."

Bloomberg - "Cayne to Step Down as Bear Stearns CEO, Person Says" (1-8-08)

"Bear Stearns Cos.' James 'Jimmy' Cayne plans to hand over the chief executive officer role to his hand-picked successor, staying on as chairman as the firm tries to recover from the collapse of the subprime mortgage market, a person with direct knowledge of the matter said. Board members have been notified by Cayne, 73, that he will step down as CEO of the New York-based company, according to the person, who declined to be named because the decision isn't public. He will be succeeded by President Alan Schwartz, 57, and an announcement may be made as soon as today, the person said."

Yahoo - "Dollar Falters As Equities Skid Lower" (1-8-08)

"The dollar gave up some of Monday's gains Tuesday amid rocky U.S. housing data and a plunging market, as traders looked ahead to European interest rate decisions later this week. The dollar inched downward against the euro. The 15-nation currency was worth $1.4710 in late New York trading, up from $1.4696 Monday. The British pound also crept up to $1.9713 from $1.9697."

CBIA - "CBIA President & CEO Responds to State of the State Address" (1-8-08)

"Today, California Building Industry Association (CBIA) President & CEO Robert Rivinius commended Governor Schwarzenegger for highlighting the importance of the homebuilding industry on the state and its economy. Additionally, Rivinius called on the Governor and the Legislature to take immediate action to support industry efforts to increase homeownership rates in the state as part of the solution to the State’s budget crisis. Rivinius stated: 'We’re encouraged that Governor Schwarzenegger mentioned the importance the homebuilding industry plays in California’s economy and in the state’s budget and his commitment to infrastructure investment.'"

Mortgage Bankers Association - "HUF Issues Final FHA Appraiser Roster Requirements" (1-8-08)

"This final rule explicitly conforms the eligibility requirements for applicants to the Federal Housing Administration (FHA) Appraiser Roster to longstanding HUD practices, as well as to existing nationwide industry practice. Only appraisers on the roster may perform required appraisals of properties that are to serve as security for FHA-insured single-family mortgages. Among other requirements, the current regulations require that an applicant must be a state-licensed or state-certified appraiser and pass a HUD examination on FHA appraisal methods and reporting."

Bloomberg - "Countrywide Loses Most Since 1987 on Funding Concern" (1-8-08)

"Countrywide Financial Corp. dropped the most since Black Monday in October 1987 in New York trading on speculation that it needs cash to continue operating its mortgage business. Investors drove Countrywide shares down 79 percent last year on concern the company was suffering from a cash shortage. The company tapped emergency credit lines and got a bailout from Bank of America Corp. as the worst housing slump in 16 years fueled bets that Countrywide might seek bankruptcy court protection."

Bloomberg - "Barclays Capital's Kvalheim Leaves After Debt Losses" (1-8-08)

"Barclays Capital Co-President Grant Kvalheim stepped down, leaving Jerry del Missier as sole president two months after the firm said it would write down credit securities worth 1.3 billion pounds ($2.6 billion). Barclays Capital, the securities arm of Barclays Plc, shifted responsibility for credit trading from Kvalheim to del Missier in September. Kvalheim, 51, oversaw investment banking, loan origination and loan syndication. Del Missier, 45, added trading of credit-related securities, including collateralized debt obligations, to commodities and equities."

Yahoo - "Feds may expand mortgage help program" (1-8-08)

"Treasury Secretary Henry Paulson said Tuesday the administration was exploring what would be a significant expansion of the program to help at-risk mortgage holders. Paulson, in an interview on CNBC, said the administration was involved in discussions with the mortgage industry to expand a current program to freeze adjustable rate mortgages for five years to include borrowers of loans at prime rates. Currently, the rate freeze only covers a much smaller segment of adjustable rate loans, those made to subprime borrowers. Those are borrowers with weak credit histories."

Voice of San Diego - "With Fraud Gaining Attention, New Appraisers Now Must Go to College" (1-8-08)

"With prosecutors nationwide illuminating real estate fraud schemes undertaken during this decade's heated housing market, at least one of the state's legions of real estate professionals face new training requirements. California's Office of Real Estate Appraisers raised the bar last week for would-be appraisers wishing to join the 19,500 appraisers already licensed and working around the state."

Reuters - "IndyMac Says GSE Costs May Hinder Loan Originations" (1-8-08)

"IndyMac Bancorp Inc'smortgage loan originations slumped 53 percent in November from a year earlier and may be hurt more as Fannie Mae and Freddie Mac tighten requirements on loans they purchase, the company said on a Web site."

Los Angeles Times - "Skid row's neediest may get housing and care" (1-8-08)

"Today, the county Board of Supervisors is scheduled to vote on additional steps for the three-year, $5.6-million pilot program called Project 50, which is designed to provide immediate housing and services for the participants. If the board approves the next phase, beginning next week a county social service team of seven -- including a social worker, mental health employees, advocates for the homeless, a representative of the Veterans Administration and a benefits specialist -- will return to skid row."

Bloomberg - "Banks May Have to Boost Loss Reserves, Moody's Says" (1-7-08)

"Banks may be required to set aside more capital to offset the risk of losses on new collateralized debt obligations and other complex securities, according to Moody's Investors Service."

St. Petersburg Times - "Sharks await big meal but may go away hungry" (1-7-08)

"More than a couple of e-mailers to the newspaper can't discuss the recent housing plunge without cackling with pleasure. Okay, so I can't hear them cackling, but that's the tone of their messages. Some salivate at the prospect of scooping up cheap houses from chumps who rashly bought at the housing peak. They'll wait for the Great Meltdown and then come in to sop up the drippings. Some even predict a return to three-bedroom, two-bath houses in the suburbs for $88,000."

The News-Press - "Reckless debt has led to our real estate woes" (1-7-08)

"Most of the media attention related to the real estate debacle focused on stratospheric pricing, speculator greed, unfair tax burdens and an insurance crisis, creating what some would call the perfect storm. I'm convinced the cleanup will take longer than most category 5 hurricanes. I believe the reason, and the one most often swept under the rug, is the egregious debt level of most individuals and families. Excessive debt of course can be due to accidents, illness or other tragedies, but unfortunately bad choices and turning homes into ATMs play the largest role in excessive debt."

Bloomberg - "Fed's `Inflation Problem' Gets Some Ad Hoc Help" (1-7-08)

"U.S. home prices are falling on a national average basis for the first time since the Great Depression. The rate of decline varies across the country, with once-hot markets (Florida, Southern California, Las Vegas, Phoenix) turning cold faster than others. More than 100 mortgage lenders have gone belly-up. Banks are stuck with billions of dollars in bad loans. Investors who bought securities collateralized with pools of subprime loans don't know what their holdings are worth. And the market for that debt has virtually dried up."

Bloomberg - "CIBC Ousts Shaw, Kilgour After Debt Writedowns" (1-7-08)

"Canadian Imperial Bank of Commerce, the country's worst-performing bank stock last year, ousted its top investment banker and chief risk officer after announcing debt writedowns of as much as $3 billion, more than any other Canadian lender. Brian Shaw, chief executive officer of CIBC World Markets, will be replaced by TSX Group Inc. CEO Richard Nesbitt, the Toronto-based bank said today in a statement. Chief Financial Officer Tom Woods will replace Ken Kilgour as risk officer."

Bloomberg - "Rogers Says U.S. to Have Worst Recession `in a While'" (1-7-08)

"The U.S. economy is heading for a recession that will be the worst 'in a while' and investors should sell the dollar as global currencies weaken, investor Jim Rogers said."

Real Estate Journal - "Watchdog Probes Wall Street's Role in the Mortgage Industry" (1-7-08)

"The Financial Industry Regulatory Authority, Wall Street's self-regulatory body, last month sent letters to firms asking for documents, including marketing materials, a list of supervisory policies and procedures, and descriptions of how collateralized mortgage obligations were valued, according to a copy of the letter reviewed by The Wall Street Journal. The Finra letter suggests that the regulators are looking into whether brokers sold these risky investments to individuals just as the market for related products was collapsing. Finra specifically asks for offering documents on products sold, created or distributed during the months of March and June 2007. The mortgage market had weakened since the previous fall and fell sharply over the spring and summer."

Los Angeles Times - "Paulson hints of ARM rate freeze" (1-7-08)

"We need to see all servicers reporting results to HOPE NOW to measure effectiveness and then make adjustments as needed. This may include using elements of a systematic approach for adjustable-rate mortgages other than sub-prime if it will benefit homeowners and investors."

Orange County Register - "A bottom best-case for '08 housing" (1-6-08)

"There is no unanimous verdict on this year's market in my collection of predictions that were assembled, in part, for my real estate blog. But nobody seems very chipper at this moment in time. Those observers closest to the housing game seem the most optimistic that the market's serious slump may be a bad memory by year's end."

Orange County Register - "Real estate means real economic risks" (1-6-08)

"Troubles in the real estate market are weighing on the economic outlook for Orange County in 2008. Economists are divided on whether the sagging housing market will tip the county's economy into recession. It all depends on how you define recession. Economists at Chapman University are predicting that job losses in the real estate, lending and construction sectors will pull the county's job growth rate into negative territory for two consecutive calendar quarters; that's Chapman's definition of a recession."

St. Petersburg Times - "Jobs sink, worries rise" (1-5-08)

"The unemployment rate rose from 4.7 percent in November to 5 percent in December, the Department of Labor reported Friday. While that's not a high rate historically, it's considerably worse than the year-ago rate of just 4.3 percent. And it was enough to send stocks into a swan dive as some skittish investors headed for the hills. The Dow Jones Industrial Average fell nearly 2 percent Friday, dropping 256.54 points to close at 12,800.18."

Bloomberg - "Pimco's Gross Says Fed May Not Avoid a Recession" (1-5-08)

"Bill Gross, manager of the world's biggest bond fund, said the Federal Reserve may not be able to avoid a recession even if central bank policy makers lower borrowing costs by at least another percentage point."

Orange County Register - "Wells Fargo eyes added 10% home price drop" (1-5-08)

"The O.C. housing market is becoming more unbalanced by the day. This is evident in the glut of existing home inventories in the County. Unsold existing home inventories in Orange County hit 25.3 months at current sales rates. That is five times the level of inventories found in a “normal” housing market with rising home prices. The final nail in the proverbial coffin was the August and September financial turmoil, which is quickly morphing into a full-blown credit crunch. This caused banks to tighten credit standards even further and extend the tightening into the prime and Alt-A mortgage markets that up until then were virtually untouched by what was unfolding in the sub-prime space. Orange County home sales have dropped nearly 42 percent over the past twelve months through October, and median existing home prices have dropped by 6.4 percent, according the California Association of Realtors."

North County Times - "Small builders struggle to stay afloat" (1-5-08)

"Construction spending nationally is down 2.6 percent from 2006 to $1.08 trillion, according to a report released Wednesday by the U.S. Census Bureau. And local building permits, which foretell future construction spending, indicates local construction will plummet even more over the next year. New home permits in San Diego County for November fell 35 percent from the same month in 2006 to 170, according to data from Burbank-based Construction Industry Research Board. The amount of money expected to be spent on 2007 home permits, $1.7 billion, is down 26 percent from 2006 and 49 percent from 2005."

The San Diego Union Tribune - "County faces glut of office space" (1-4-08)

"The county posted an overall office vacancy rate of 14 percent in the fourth quarter, according to a report by the CB Richard Ellis brokerage firm. That's up from 10.4 percent in January 2007. "

Bloomberg - "Credit Derivatives Head for Worst Week in More Than Two Months " (1-4-08)

"The risk of companies defaulting rose the most in more than two months this week after U.S. reports showing a slowdown in jobs growth and manufacturing stoked concern that the economy will sink into a recession. Credit-default swaps tied to the bonds of mortgage lender Countrywide Financial Corp., homebuilder Lennar Corp. and Citigroup Inc., the biggest U.S. bank by assets, increased. Defaults may rise almost seven-fold to 2.25 percent this year, analysts at New York-based JPMorgan Chase & Co., the biggest underwriter of high-yield, high-risk corporate bonds last year, said in a report yesterday."

Bloomberg - "Loan Funds Were 2007's Worst Performers on Subprime" (1-4-08)

"Mutual funds that buy bank loans turned in the smallest gains of any fixed-income group in 2007 after subprime-mortgage losses scared off high-yield debt investors. Loan funds managed by firms including Eaton Vance Corp. and Hartford Investment Management Co. returned 1.1 percent last year, according to data from Chicago-based Morningstar Inc. U.S. Treasury funds that protect against inflation rose 10 percent, the most in Morningstar's fixed-income group. "

Bloomberg - "California Leads Borrowing Cost Rise on Housing Slump" (1-4-08)

"From Sacramento and Albany to Boston and Tallahassee, politicians in state capitals across the U.S. are wrestling with the biggest increase in borrowing costs in three years as they struggle to shore up budget deficits widening on the national housing slump. The extra yield investors require on 10-year bonds from California, Florida, Massachusetts and New York relative to benchmark tax-exempt rates doubled since July to the widest since at least 2004, according to data compiled by Bloomberg. California's gap grew to 0.44 percentage point from 0.20 percentage point, adding $24 million in extra interest over 10 years for every $1 billion borrowed."

Real Estate Journal - "Owning vs. Renting:Still Not Close" (1-4-08)

"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."

Real Estate Journal - "Some Home Fix-Up TasksAre Worth Skipping" (1-4-08)

"If your New Year's resolution is to sell a home in 2008, it's probably time to start thinking about how to make that home stand out from the rest. But before planning any projects, beware: Homeowners aren't recouping as many improvement costs as they could in recent years, according to a recent study by Remodeling magazine. In fact, real-estate agents advise clients not to overdo it, regardless of what the local market conditions are like."

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."

Boston.com - "Fixes made in 2007 not enough to halt foreclosures" (1-2-08)

"in 2008, state and federal officials must decide how to regulate subprime loans. The industry is gone for the moment. Lenders sold about $26.3 billion of subprime loans in the third quarter of 2007, down more than 80 percent from the roughly $139 billion sold at the peak of the boom in the fourth quarter of 2005, according to Standard & Poor's. But its recovery in some form is widely considered inevitable."

Bloomberg - "National City to Trim Dividend by 49%, Cut 900 Jobs" (1-2-08)

"National City Corp., Ohio's largest bank, will reduce its quarterly dividend by 49 percent and cut 900 more jobs as it stops making home loans through brokers. The shares fell 3.9 percent. The lender has eliminated 3,400 positions in the past year, including the reductions announced today in a statement. National City, based in Cleveland, will continue making home loans through its staff at 300 mortgage offices and 1,400 bank branches, spokeswoman Kristen Baird Adams said."

Seeking Alpha - "Counterparty Risk and the Subprime Fiasco" (1-2-08)

"If an Investment Bank has large exposure to the subprime mortgage market and the executives at that bank feel uncomfortable with it, they will hedge some of their risk. They do this by purchasing insurance. Another financial entity or counterparty will sell the investment bank an insurance contract or credit derivative. This contract will pay off if large numbers of subprime borrowers default on their mortgage payments. The counterparty can be another investment bank, insurance company, bank, hedge fund etc."

Mortgage Bankers Association - "Mortgage Licensing System Starts Today" (1-2-08)

"The CSBS/AARMR Nationwide Mortgage Licensing System (NMLS) launched January 2 initially with seven states participating in the new venture. At least 8 additional states are expected to join the system during 2008."

Mish's Global Economic Trend Analysis - "How Does One Invest For 'Muddle Through'?" (1-2-08)

"If one expects some sort of muddle through in which banks are impaired because of writeoffs, where foreclosures and credit card defaults are rising, and unemployment is about to increase dramatically, the correct answer is to continue to hold treasuries regardless of what one feels about the CPI and prices."

The New York Times - "In the Land of Many Ifs" (1-2-08)

"The bursting housing bubble remains a locus of concern. An era of free-flowing credit and speculation has led to a far-flung empire of vacant, unsold homes — 2.1 million, or about 2.6 percent of the nation’s housing stock, Mr. Zandi said. Even in the worst years of recessions in the early 1980s and 1990s, the share of vacant homes did not exceed 1.9 percent. This assemblage of unsold properties will not be whittled down to normal levels, economists suggest, until national home prices fall by at least 15 percent from their peak, reached in the summer of 2006. So far, prices have dropped a little more than 5 percent, according to the Standard & Poor’s Case-Shiller home price index."

Real Clear Politics - "Can We Cure Our 'House Lust'?" (1-2-08)

"Our housing excesses, starting with supersizing. In Sweden, Britain and Italy, new homes average under 1,000 square feet. By 2005, the average newly built U.S. home measured 2,434 square feet, and there were many double, triple or quadruple that."

Charles Hugh Smith - "Brain-Dead Predictions about Housing" (1-2-08)

Housing prices will fall farther and longer than every guess being bandied about in the mainstream and financial media. You know the stories--expert #1 foresees a 15% drop, expert #2 says a 30% decline is possible in the frothiest markets, etc. Why fuss around with namby-pamby numbers like 15-30%? I'd say it's absurdly obvious that 80% to 100% declines are already baked into some areas--yes, houses won't find buyers for a $1, i.e. the value will suffer a 100% decline to zero."

Los Angeles Times - "Median listing prices dropped $61K in '07" (1-2-08)

"Median listing prices in greater Los Angeles continued their slide over the past week, dropping by $900, to $489,000, according to Housing Tracker's analysis of MLS listings. Over the past year, median listing prices have dropped 11.1% -- or, roughly $61,000, or, if you prefer, $1,170 per week, according to Housing Tracker's analysis."

Orange County Register - "Orange County home prices and sales, mid-December" (1-2-08)

"For the 22 business days ending Dec. 14, sales for all types of Orange County home sales decreased 44.1 percent. The median sales price decreased 7.0 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."

Orange County Register - "O.C. rents eyed to be flat in ‘08" (1-2-08)

"Most economic prognostications that I have read for the coming year figure 2% or less growth, which I translate as flat or no job growth. So where would the 'Bodies on beds' renter demand to come from to fuel increased rents? Orange County has been a strong market for years because a continual imbalanced demand and supply situation. That was a prolix way of saying there is a shortage of apartment rental stock. Occupancy rates show the ability of the market to absorb new apartment construction and maintain the 95%, or above, 'occupancy Golden Mean.' It is also a very well managed market, with all of the big players owning and or managing large complexes, so it is a very competitive market from an owner’s point of view. Again I don’t see increased job growth increasing occupancy."

The San Diego Union Tribune - "Three-month T-bill rate hits six-week high" (1-1-08)

"The Treasury Department auctioned $20 billion in three-month bills at a discount rate of 3.310 percent, up from 3.280 percent last week. An additional $19 billion in six-month bills was auctioned at a discount rate of 3.390 percent, down from 3.490 percent last week."

The San Diego Union Tribune - "Existing home sales keep sluggish pace" (1-1-08)

"Sales of previously owned homes nudged up in November, but that didn't improve the broader picture of a feeble housing market hit by record-high foreclosures and harder-to-get credit. The National Association of Realtors reported yesterday that sales of existing single-family homes, condominiums and townhouses rose 0.4 percent in November from October, to a seasonally adjusted annual rate of 5 million units."

Seeking Alpha - "Bad Housing Predictions of 2007" (1-1-08)

"'Although residential construction continues to sag, some indications suggest that the rate of home purchase may be stabilizing, perhaps in response to modest declines in mortgage interest rates over the past few months and lower prices in some markets,' Bernanke said."

San Luis Obispo - "Homebuilding permits slump as sales decline" (1-1-08)

"Home sales aren’t the only thing that slowed this year. Fewer residential building permits — nearly 1,000 — were issued throughout the county in 2007 than in any year since 1995, according to the Home Builders Association of the Central Coast. That figure represents a 32 percent drop in permits from the same period last year when there were 1,461 permits issued."

CNBC - "More Aid Needed for Housing Market: White House" (1-1-08)

"Early last month, President George W. Bush unveiled a plan to help some homeowners avoid foreclosures as some 1.8 million mortgages with low starter interest rates are due to reset to sharply higher rates this year. Ed Gillespie, counselor to Bush, pointed to efforts by the U.S. Congress to overhaul the Federal Housing Administration program developed in 1934 amid the Great Depression and designed to make home ownership more affordable. Members of the House of Representatives and Senate have been trying to work out a compromise plan."

NAR - "Existing-Home Sales Rise in November, Market Likely Stabilizing" (12-31-07)

"Existing-home sales rose slightly in November, indicating a stabilization in housing in the wake of mortgage disruptions earlier this year, according to the National Association of Realtors®. Total existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 0.4 percent to a seasonally adjusted annual rate1 of 5.00 million units in November from an upwardly revised pace of 4.98 million in October, but are 20.0 percent below the 6.25 million-unit level in November 2006."

Bloomberg - "Citigroup, Goldman Cut LBO Backlog With 10% Discounts" (12-31-07)

"Citigroup Inc., Goldman Sachs Group Inc., Morgan Stanley and JPMorgan Chase & Co. are offering discounts of as much as 10 cents on the dollar to clear a $231 billion backlog of high-yield bonds and loans. While lenders reduced the overhang by 32 percent since July, they are struggling to unload debt from this year's record $438 billion of leveraged buyouts after losses from securities linked to subprime mortgages reduced demand for higher-yielding assets, according to data compiled by Bloomberg. They sold some bonds at a discount of 10 percent to face value and loans at 5 percent below par, according to London-based Barclays Plc."

Bloomberg - "Treasuries Post Best Gain Since 2002; Data May Show Growth Fell" (12-31-07)

"U.S. Treasuries rose, posting their best yearly returns since 2002, before reports this week that may show the housing recession is slowing economic growth. Treasuries returned 8.7 percent in 2007, according to a Merrill Lynch & Co. index, as losses tied to subprime mortgages stoked demand for the safety of government debt. Ten-year notes yielded almost 1 percentage point more than two-year rates. Traders forecast the world's largest economy will slow enough to lead the Federal Reserve to cut interest rates at least twice in 2008."

Bloomberg - "Defaults on Insured Mortgages Rise 35% to Record" (12-31-07)

"Defaults on privately insured U.S. mortgages rose 35 percent in November to a record, an industry report today showed, adding to evidence the U.S. housing slump is deepening. The number of insured borrowers falling more than 60 days late on payments jumped to 61,033 last month from 45,325 in November 2006, according to data from members of the Washington- based Mortgage Insurance Companies of America. The missed payments, often a prelude to foreclosure, represented a 2.9 percent increase from October."

The Wall Street Journal - "Lender Lobbying Blitz Abetted Mortgage Mess" (12-31-07)

"During the housing boom, the subprime industry succeeded at more than just writing mortgages. It also shot down efforts by some states to curtail risky lending to borrowers with spotty credit. Ameriquest Mortgage Co., until recently one of the nation's largest subprime lenders, was at the center of those battles. Working with a husband-and-wife team of Washington lobbyists, it handed out more than $20 million in political donations and played a big role in persuading legislators in New Jersey and Georgia to relax tough new laws. Those victories, in turn, helped blunt efforts by other states to crack down on reckless lending, critics of the industry contend."

Los Angeles Times - "How a bank fell victim to loan fraud" (12-31-07)

"'Everything was more lax,' said Jack Guttentag, a finance professor emeritus at the University of Pennsylvania's Wharton School. 'It was just easier to commit fraud.' Evidence of that can be found in FBI reports of mortgage fraud, which increased eightfold from 5,623 in 2002 to 46,717 this year. But of all those cases, few compare with an alleged three-year scam that used trumped-up appraisals to fraudulently secure $142 million in loans from Lehman Bros. and another lender."

The Guardian - "From the sub-prime to the ridiculous: how $100bn vanished" (12-31-07)

"The first real concerns about sub-prime mortgages emerged at the end of February, when Wall Street suffered its worst day since the terrorist attacks of 2001. By April one of the biggest sub-prime mortgage lenders in the US had gone bankrupt and there was talk of a full-blown crisis. Credit more broadly began to dry up as lenders became nervous."

Mish's Global Economic Trend Analysis - "Things That "Can't" Happen" (12-31-07)

"It is the very nature of the market that it takes the convincing of nearly everyone to believe that something cannot happen, to actually cause it to happen. Consider housing. Everyone became convinced that housing was a one way ticket north, that all housing was local, and housing would not decline nationally. This mass belief in a faulty housing premise in spite of evidence to the contrary in Japan is what helped form the US housing top. Greater fools everywhere who came to believe that faulty theory eventually rushed in to speculate in housing. That made the top. Even the rating agencies got into the act."

Option Armageddon - "Could Fan and Fred go bust?" (12-31-07)

"Perish the thought. Between them the two companies back well over $4 trillion of residential mortgages in the U.S. Underneath this pile of debt the companies have a tiny capital cushion of about $40 billion each. And that counts the $6 billion Freddie recently raised in a preferred stock offering."

Times Online - "Top economist says America could plunge into recession" (12-31-07)

"Losses arising from America’s housing recession could triple over the next few years and they represent the greatest threat to growth in the United States, one of the world’s leading economists has told The Times."

Los Angeles Times - "Mortgage crisis takes a bite out of states and cities" (12-31-07)

"Dozens of states, counties and cities across the nation will enter the new year facing deep and unexpected budget holes as the widening mortgage crisis cuts sharply into tax revenue. Elected officials, scrambling to adjust, are trimming money for public schools, reducing grants to help the homeless, even asking police to dry-clean their uniforms less often."

Real Estate Journal - "Family Goes to the Court House To Stave Off Foreclosure" (12-31-07)

"These days, more homeowners are digging in their heels. They delay foreclosures by filing for bankruptcy on the eve of a court-ordered sale of the property, or by refusing to answer the door when the plaintiff tries to 'serve' them with a foreclosure lawsuit. They pay lawyers a few hundred dollars to file a motion that can buy them a little more time."

Santa Cruz Sentinel - "Wave of foreclosures hits county" (12-30-07)

"More than 240 homeowners in Santa Cruz County have lost their homes this year -- five times as many as in 2006 -- and hundreds more are in danger of losing homes, all because they can't afford their mortgages."

Orlando Sentinel - "Mortgage bailout plan might not help many borrowers" (12-30-07)

"U.S. Treasury Secretary Henry Paulson Jr., in his statement to the press, said that up to 1.2 million of the 1.8 million homeowners whose subprime ARMs are due to reset in 2008 and 2009 would be 'eligible for fast-tracking into consideration for affordable refinanced or modified mortgages.'"

Orange County Register - "How subprime lending all started in O.C." (12-30-07)

"A clear plastic plaque on William Komperda's desk memorializes a 1990 deal that helped launch the made-in-Orange County subprime lending bonanza. Komperda, a former investment banker now living in Connecticut, calls the plaque a 'tombstone,' financial speak for a securities offering notice. But the 'tombstone' symbolizes an industry that rocked financial markets around the world in 2007."

Orange County Register - "Empty O.C. office space eyed as growing problem" (12-30-07)

"The O.C. office market for 2008 basically should look like this: All office types will see vacancy go up. It is already felt with business confidence lowering and large companies scaling back. Mortgage and other companies that depended on the housing cycle are on the downward slope and have moved out or scaled back leaving more empty office space. Rates should slip 10% to 20%. Low-rise office properties may hold up by the fact they can offer lower rates; and Class 'A' will always attract the image-conscious tenants. Don’t panic: third quarter of ‘08 will be the real time to gauge the market. The move will be down on rates for 2008."

The Washington Post - "More Hoops for Borrowers" (12-29-07)

"If you hope to get a mortgage this coming year, look beyond your credit score, because that's what lenders will be doing. The mortgage mess that has grabbed the attention of politicians, economists and investors has also altered the loan options available to borrowers. Mortgages that require no down payment or no verification of income or assets have fallen out of favor. So have mortgages that exceed $417,000, also known as jumbo loans. It's still possible to find all those types of loans, but count on paying higher rates and jumping through more hoops."

The San Diego Union Tribue - "Housing slump seen continuing far into '08" (12-29-07)

"Home builders are sharply curtailing construction and cutting prices across the country as they struggle to break out of the worst housing slump since the early 1990s. But buyers remain scarce, and analysts say the market may not bottom out until well into next year or even later."

Seeking Alpha - "New One Family Home Sales: Ugly!" (12-29-07)

"The Census Department released their New Home Sales data, and it warn't none too purty: Sales of new one-family houses in November 2007 fell to a 12-year monthly low. The seasonally adjusted annual sales rate was 647,000, far below the consensus of 720,000. As expected, October sales were revised downwards. This is down 9% from October's levels. Year over year, November '07 new-home sales were 34.4% lower than November 2006. That's the largest year-to-year decline since 35.3% in January 1991."

MSN - "The new ghost towns" (12-29-07)

"More people buying into new developments are being left high and dry when their builders file for bankruptcy. Here's how homeowners can protect themselves."

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."

Bloomberg - "Citigroup May Cut Dividend by 40%, Goldman Sachs Says" (12-27-07)

"Citigroup Inc., the biggest U.S. bank, may cut its dividend 40 percent to preserve capital and write down more fixed-income securities than it has told investors to expect, according to Goldman Sachs Group Inc. JPMorgan Chase & Co., the third-largest U.S. bank by assets, may write off $3.4 billion in fixed-income securities in response to the collapse of the subprime mortgage market, double Goldman's previous estimate, analysts led by William Tanona said in a report on the companies dated Dec. 26."

Bloomberg - "Dollar Strategists Predict End of Bear Market in 2008" (12-27-07)

"The dollar is poised to end a two- year slide against the euro in 2008 as government-backed funds in Asia and the Middle East purchase U.S. assets, currency strategists say. The currency will gain 4.4 percent to $1.40 per euro by the end of the third quarter, according to the median forecast of 43 strategists surveyed by Bloomberg News. The dollar is down 9.8 percent this year to $1.4638 per euro, after weakening more than 10 percent in 2006."

CNN - "Some mortgage rates inch higher" (12-27-07)

"Some mortgage rates rose along with bond rates this week as reports of stronger consumer spending in November were tempered by disappointing readings of other economic measures, Freddie Mac reported Thursday. The government-sponsored loan buyer said the rate on a 30-year fixed-rate loan averaged 6.17 percent for the week ending Dec. 27, up from 6.14 percent a week earlier."

NAR - "NAR Says Terrorism Insurance Law Will Protect Commercial Market" (12-27-07)

"The commercial real estate market and the health of the nation’s economy as a whole will benefit from the reauthorization of the federal government’s terrorism risk insurance program, which President George W. Bush signed into law yesterday. The National Association of Realtors® has long advocated for passage of the Terrorism Risk Insurance Revision Extension Act to maintain a strong commercial market."

Mortgage Bankers Association - "Mortgage Applications Decrease In Latest MBA Weekly Survey" (12-27-07)

"The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending December 21, 2007. The Market Composite Index, a measure of mortgage loan application volume, was 603.8, a decrease of 7.6 percent on a seasonally adjusted basis from 653.8 one week earlier. On an unadjusted basis, the Index decreased 8.2 percent compared with the previous week and was up 9.9 percent compared with the same week one year earlier."

Seeking Alpha - "Shiller: Single-Family Housing Market Is 'Grim'" (12-27-07)

"Data through October 2007 for the Case-Shiller Home Price Indices fell 6.1% year over year, showing broadbased declines in the prices of existing single family homes across the United States. This marks the 10th consecutive month of negative annual returns, and the 23rd consecutive month of decelerating returns. This was the biggest decline in this down cycle as prices fell 1.42% sequentially."

San Francisco Chronicle - "Home prices fell faster in October" (12-27-07)

"The decline in home prices accelerated and spread to more regions of the country in October, according to a series of private indexes released Wednesday. Prices fell 6.1 percent from October 2006 in 20 large metropolitan areas, according to Standard & Poor's/Case-Shiller indexes, compared with a 4.9 percent decline in September. All but three of the 20 regions saw real estate values fall, and even the three places where prices were up from a year ago - Seattle, Portland, Ore., and Charlotte, N.C. - saw prices fall from a month earlier."

The Washington Post - "Mortgage Probes Face Big Hurdles" (12-27-07)

"The nation's largest banks are losing billions of dollars from the mortgage debacle. But will pain from bad housing bets be compounded by government investigations?"

This Is Money - "Property confidence crash as 75% see falls" (12-27-07)

"Confidence in the property market has crashed with three quarters of people predicting house price falls in 2008 - and just one in five believing the average home will rise in value. A poll of more than 4,000 people by This is Money has revealed that 75% expect property to fall over the coming year and 52% say prices will drop by 11% or more."

Los Angeles Times - "WaMu lowers limits on HELOCs" (12-27-07)

"Various blogs have been popping in the past 24 hours with rumors that Washington Mutual would be lowering limits on existing home equity lines of credit. It turns out there is some truth to the rumors -- WaMu is in fact lowering the amount of some existing HELOCs, but not as sharply as some bloggers have predicted. "

Los Angeles Times - "L.A. listing prices down another $5,100" (12-27-07)

"Good morning. Median listing prices in greater Los Angeles continued their slide over the past week, dropping by $5,100, or 1.0% in a week, according to Housing Tracker's weekly analysis of MLS listings."

Real Estate Journal - "Reverse Mortgages: A Way OutOf a Bind for Older Homeowners" (12-27-07)

"With a reverse mortgage, the bank makes payments to the homeowner instead of the homeowner making payments to a bank. The loan is repaid, with interest, when the borrower sells the house, moves out permanently or dies. The products are complex and have high fees -- typically about 7% of the home's value -- and they make it difficult for homeowners to leave the property to their heirs. But they may be the best option for people who have built up equity in their home and would otherwise lose it."

Real Estate Journal - "Cities Across the Globe ProposeLarge Real-Estate Projects" (12-27-07)

"Some of the biggest cities in the world are proposing the most ambitious real-estate projects in a generation, a sign of growing confidence in urban living even as the current financial landscape grows bleaker. The list is long and expensive, with more than 15 ventures, some of which are expected to cost as much as $30 billion: Four in New York City, at least three in Dubai, two in London, Chicago and Milan, and one in Amsterdam, Los Angeles, Paris and Mumbai."

CNN - "Home prices post record decline" (12-26-07)

" Home prices fell 6.7 percent in October, compared with a year ago, according to the S&P/Case-Shiller 10-city home-price index. It was the largest drop recorded since the index began in 1987. It marked the 10th consecutive month of price depreciation and 23 months of decelerating returns."

Bloomberg - "Biggest Homebuilder Writedowns Are Yet to Come" (12-26-07)

"Look at almost any major homebuilder's balance sheet these days, and it practically screams at you: 'Don't believe Mr. Market. Trust me!' Either homebuilders as a class are grossly undervalued, or their assets are worth much less than their financial statements say. Odds are it's the latter. Home prices still show no sign of bottoming. And next month may bring lots of new confessions, when most of the companies report year-end earnings."

Bloomberg - "Ambac, MBIA Might Be `Buys' for the Few, the Brave" (12-26-07)

"Buy the bond insurers. That's a distinctly contrarian view, sure, especially after the year the bond insurers have had. Their fairly recent forays into subprime mortgages have put them in danger of losing their AAA ratings, which is what their business is based upon. Yet if you look past the headlines, and the accompanying hysteria, maybe things are about to look up. The stocks of Ambac Financial Group Inc. and MBIA Inc., which both lost about 70 percent of their value the past three months, are showing up on some securities firms' lists of buy recommendations."

Mish's Global Economic Trend Analysis - "Peter Schiff Replies to Deflation Rebuttal" (12-26-07)

"I believe that eventually long-term interest rates will head much higher to reflect significantly higher inflation expectations, particularly here in the U.S. where a lack of domestic savings in the absence of willing foreign lenders will put even more upward pressure on rates."

Seeking Alpha - "Are We Having a Housing Crisis Déjà Vu?" (12-26-07)

"As more families throw in the towel and head to foreclosure here and across the nation, the social costs of collapse are adding up in the form of higher rates of homelessness, crime and even disease. While no current residents claim to be victims of foreclosure, all agree that tent city is a symptom of the wider economic downturn. And it's just a matter of time before foreclosed families end up at tent city, local housing experts say."

The Washington Times - "Blame abounds for housing bust" (12-26-07)

"John Stumpf, president of Wells Fargo & Co., the second-largest U.S. mortgage lender and a survivor of the housing busts of the 20th century, blames today's crisis on unscrupulous lending practices, which joined in a toxic mix with outright greed and extraordinarily low interest rates to send house prices soaring 90 percent between 2000 and 2006. When the bubble burst, house prices collapsed by 5 percent to 20 percent in cities nationwide."

The Washington Post - "Dollar's Fall Is Felt Around The Globe" (12-24-07)

"The sharp decline of the U.S. dollar since 2000 is affecting a broad swath of the world's population, with its drop on global markets being blamed at least in part for misfortunes as diverse as labor strikes in the Middle East, lost jobs in Europe and the end of an era of globe-trotting rich Americans. It marks a shift for Americans in the global economy. In times of strength, a mightier dollar allowed Americans to feed their insatiable appetite for foreign goods at cheap prices while providing Yankees abroad with virtually unrivaled economic clout. But now, as the United States struggles to fend off a recession, observers say the less lofty dollar is having both a tangible and intangible diminishing effect."

Mish's Global Economic Trend Analysis - "Not Your Father's Deflation: Rebuttal" (12-24-07)

"Schiff makes a false assumption that the Fed can replace credit out of thin air. The Fed is simply not in control of credit at all. The Fed can encourage borrowing but it cannot force it. The second failure by Schiff pertains to monetary printing. There are constraints on the Fed that he ignores. For example the Fed cannot simultaneously target both money supply and interest rates. Should the Fed pursue a massive printing campaign, interest rates will rise. Think of the consequences for housing and commercial real estate. Schiff ignores the consequences of interest rates on existing debt, much of which is variable rate. Furthermore, think about what rising rates would do to future expansion plans of businesses."

Reuters - "Rising inflation may cause Treasury bond yields to spike" (12-24-07)

"On Monday, the nominal benchmark 10-year Treasury note was yielding 4.21 percent, with the nominal 30-year bond yielding 4.61 percent. For now, most bond investors are betting that as the U.S. economy edges toward recession, demand will ebb, putting a lid on consumer prices. Since inflation is a lagging indicator, that would be the textbook reaction of prices to the onset of a painful economic downturn."

Palm Beach Post - "Condo crash burns big, sophisticated investor, too" (12-24-07)

"It's not just schoolteachers, bartenders and other real estate amateurs who got burned by the condo crash. Some big, seemingly sophisticated investors are taking hits, too. Condo converter Tarragon Corp. (Nasdaq: TARR) of New York just unloaded the 311-unit Floresta Apartments at 400 Via Royale in Jupiter for a hefty 28 percent loss."

Yahoo - "States eye ways to rein in property tax" (12-24-07)

"The amount paid in local and state property taxes in the country increased 50 percent from 2000 to 2006, according to Census data cited by some U.S. Congress members when discussing the topic. During that time, inflation rose 17 percent and median household income dropped 2 percent. Analysts cite a number of reasons for the dramatic bill increases including local governments and states leaning more heavily on property taxes to meet revenue shortfalls and rising home values pushing up assessments. Now, states are looking at ways to cut property taxes or at least give homeowners some relief by capping assessments and making up the revenue shortfall by raising sales taxes."

Orange County Register - "New homes in O.C. withstand wildfire better than older ones" (12-23-07)

"In the wake of firestorms that struck Southern California in October, attention has focused on whether cities and counties should restrict development in wild lands. But if such development is to take place – and even the most ardent critics are at a loss as to how to prevent it – it should be done the way it's done in Orange County, where homes are clustered together, vegetation is controlled and homes are built with noncombustible materials, say local fire officials and developers. Critics of developments in wild lands agree."

Youtube - "Paul Krugman" (12-23-07)

"In 'The Conscience of a Liberal', Paul Krugman, today's most widely read economist, studies the past eighty years of American history, from the reforms that tamed the harsh inequality of the Gilded..."

The New York Times - "This Is the Sound of a Bubble Bursting" (12-23-07)

"Waiting, scrimping, taking stock: This is the vernacular of the moment for a nation reckoning with the leftovers of a real estate boom gone sour. From the dense suburbs of northern Virginia to communities arrayed across former farmland in California, these are the days of pullback: with real estate values falling, local governments are cutting services, eliminating staff and shelving projects."

Daily News - "Trim tax loopholes, legislative analyst urges" (12-23-07)

"California faces an estimated $14 billion budget deficit, but the state's independent fiscal watchdog has an answer - trim some of the tax loopholes that total $50 billion. Simple idea. Difficult to make happen. That's because each of the hundreds of tax breaks are important to some interest group, political analysts said, and a few of those loopholes are perceived almost as a constitutional right."

Financial Armageddon - "Will they Call them 'Bushvilles'?" (12-23-07)

"Nationally, foreclosures are at an all-time high. Filings are up nearly 100 percent from a year ago, according to the data firm RealtyTrac. Officials say that as many as half a million people could lose their homes as adjustable mortgage rates rise over the next two years. California ranks second in the nation for foreclosure filings -- one per 88 households last quarter. Within California, San Bernardino county in the Inland Empire is worse -- one filing for every 43 households, according to RealtyTrac."

Yahoo - "Unpaid credit cards bedevil Americans" (12-23-07)

"Americans are falling behind on their credit card payments at an alarming rate, sending delinquencies and defaults surging by double-digit percentages in the last year and prompting warnings of worse to come."

Ventura County Star - "Unsuccessful home sellers trying their hands at sales" (12-22-07)

"The median sale price was $623,510, down 6.1 percent from $663,760 a year ago and 4.2 percent from $650,570 in October. The median is the midpoint, at which half the homes sold for more and half for less. Statewide, home sales decreased 36.2 percent. There were 287,600 units sold last month, compared with 450,930 in November 2006. California's median price fell to $488,640 last month, down 11.9 percent from $554,500 in November 2006."