Some housing bubble reports from Wall Street and Washington. "WCI Communities Inc. before the opening bell Tuesday lowered its 2006 earnings forecast on slowing demand for the company's active-adult communities, towers and expensive homes in its Mid-Atlantic markets."

"The company said orders, a key measure of future profits, fell 55.7% on a unit basis. 'During the quarter, we did not see the seasonal lift in demand for homes in most of our Florida communities that we expected and demand for homes in the Mid-Atlantic region dropped from prior periods,' said Chief Executive Jerry Starkey."

"Starkey said the company used incentives and discounts 'on a selective and fairly limited basis,' but expects that to 'moderately increase' the rest of 2006, particularly in the active-adult and second-home products."

"Struggling home builder Dominion Homes Inc. late Monday said it swung to a loss of $3.9 million in the first quarter. Revenue slipped to $61.8 million from $92.6 million as the company delivered fewer homes than in the year-ago period. 'Home sales generally remained slow in the company's markets,' Dominion said in a statement, adding that it does not expect to be profitable in 2006."

"Saxon Capital, Inc., a residential mortgage lending and servicing real estate investment trust, today announced its financial results for the first quarter of 2006. Saxon reported net income for the first quarter of 2006 of $26.4 million compared to $54.0 million for the first quarter of 2005."

From Business Week. "Still more errors have turned up in Fannie Mae's government-ordered review of its accounting, the mortgage giant disclosed Tuesday. It also said it doesn't expect the review to be finished before the second half of the year."

"The company also has said that it expects an upcoming internal report to show that its financial controls remained insufficient as recently as the end of last year."

The New York Times. "If the Federal Reserve stops raising interest rates later this year, will the rest of the world go along? When Fed policy makers meet on Wednesday to set overnight interest rates, they will almost certainly increase them by another quarter-point, to 5 percent. And investors will search for any clues about a pause in further rate increases."

"But a growing number of economists are looking at a different possibility: that changes in the global economy could keep pushing up long-term interest rates long after the Fed stops raising its benchmark rate."

"The result would be a mirror image of the 'conundrum' that perplexed Alan Greenspan. Now, even as Fed bankers indicate that they may be near the end of their increases, the long-term interest rates that determine home mortgage rates and companies' borrowing costs have crept higher."

"Increased anxiety about future inflation has been partly to blame, analysts say. But long-term rates have edged up around the world, suggesting that global forces are at work.

"As economist Robert J. Barbera, sees matters: 'It looks increasingly obvious that there is a boom on the globe today; it's just not happening here. That in turn would suggest that the moderating activity here in the United States may not elicit lower interest rates. What was a conundrum for Greenspan then becomes a problem for Bernanke.'"

"An increase in global interest rates would not necessarily be bad news for Mr. Bernanke. Higher long-term rates would help cool down American economic growth, and the housing market in particular, without requiring the Fed to take more action on its own."