Bloomberg - "Bank of China Holds $9.7 Billion of Subprime Assets" (8-23-07)

"Bank of China Ltd., the nation's second-largest bank, said it holds almost $9.7 billion of securities backed by U.S. subprime loans, the most of any Asian company. The Beijing-based bank set aside 1.15 billion yuan ($152 million) against possible losses on asset-backed securities and collateralized debt obligations backed by loans to borrowers with poor credit histories, it said in a statement today. The bank today announced first-half net income of 29.5 billion yuan."

CNN - "Bernanke: The un-Greenspan" (8-23-07)

"It may be the most important development to emerge from the recent market turbulence: The Federal Reserve, under Chairman Ben Bernanke, is going back to being a central bank. Judging by its cautious and finely-calibrated responses through a very ugly August, the Fed appears keen to put the Alan Greenspan years firmly in the past and take a much more orthodox approach to monetary policy. While the Fed will probably cut interest rates as early as next month, its behavior in August strongly suggests that Bernanke will avoid using interest rates to deliberately spark big increases in lending, the high risk strategy pursued by Greenspan from 2001 to 2004."

The San Diego Union Tribune - "Past-due mortgages swamp banks, thrifts" (8-23-07)

"U.S. banks and thrifts suffered the biggest increase in late loan payments in 17 years as more homeowners fell behind on mortgages, the Federal Deposit Insurance Corp. said yesterday. Loans more than 90 days past due rose 10.6 percent to $66.9 billion in the period ending June 30, the largest quarterly increase since 1990, the FDIC said in its Quarterly Banking Profile."

Charles Hugh Smith - "Two Irresistible Reasons Housing Will Retrace to 1997 Prices" (8-23-07)

"To get started, let's stipulate that the Great Housing Boom of the past decade was not a housing boom--it was a speculative debt-fueled bubble which happened to occur in the asset class known as real estate. As a speculative bubble, it shares the same characteristics as other speculative manias in tulips, stocks, toilet paper, etc. (Note that there is one key difference between worthless stock certificates and toilet paper: the TP has a practical use.)"

Orange County Register - "Housing industry causing ... earthquakes? cancer?" (8-23-07)

"With the current market disruption still in full swing, the media machine generates news stories almost daily about the end of the world being caused by the housing industry. Based on what we’re reading, it’s pretty clear that our industry is the root cause of a stock market crash, the war in Iraq, earthquakes in South America and most forms of cancer. 'While some of those might be true, and the down cycles inherent in the housing market are always painful, all this media coverage seems to be heavy on 'doom and gloom' and a little light on actual analysis.'"

Real Estate Journal - "How FHA Could Help Borrowers Refinance and Avoid Foreclosure" (8-23-07)

"As the subprime-mortgage crisis ripples through the broader housing market, the Bush administration is eyeing an often overlooked federal mortgage insurer to help low- and middle-income homeowners avoid foreclosure. President Bush has balked at allowing mortgage giants Fannie Mae and Freddie Mac to buy more mortgages for their portfolios to ease the credit crunch triggered by rising defaults on home loans to borrowers with poor credit. But he said earlier this month that he supports giving the Federal Housing Administration more flexibility to help those facing foreclosure refinance their homes."