The News Tribune - "FDIC warns banks to keep safety net" (6-2-07)

"Noting an operating environment that is 'more challenging than it has been in recent years,' Federal Deposit Insurance Corp. Chairman Sheila Bair warned Thursday that regulators and bankers 'need to ensure that new global capital standards do not threaten the safety net.' That net of capital on hand stretched during the first quarter as bank income fell. The FDIC said income fell because of 'the housing slump, unfavorable interest rate conditions, slower growth in the U.S. economy and higher levels of problem loans.'"

The Mercury News - "Housing market hurt by hesitation, builder says" (6-2-07)

"In addition to the glut of unsold homes on the market, the chief executive of Hovnanian Enterprises blames some of the housing industry's woes on the mind-set of buyers. 'A lot of the issue is psychological,' Ara K. Hovnanian said in a conference call Friday. Hovnanian said buyers continue to be rattled by the collapse of the subprime-mortgage market, which affects people who otherwise couldn't buy houses because they have weak credit, and by the ongoing uncertainty in the market."