Some housing bubble reports from Wall Street and Washington. "The housing market, after flying high for five years, has lost altitude and appears headed for a safe landing, Federal Reserve Chairman Ben Bernanke said Thursday. 'It seems pretty clear now that the U.S. housing market is cooling,' Bernanke said."

"On the issue of risky home mortgages, Bernanke pointed out that the Fed has issued some guidance for lenders. 'We're not saying you shouldn't make these loans. What we're saying is that they be done the right way,' Bernanke told the banking conference."

"'We do have some concerns about the non-traditional mortgage lending,' he said. Mr Bernanke noted that some of these products had previously been the preserve of wealthier borrowers, but were being increasingly extended to lower-income buyers."

"The Federal Reserve is less likely to suspend its interest-rate increases after a report yesterday showed consumer prices rose more than expected, according to Richmond Fed President Jeffrey Lacker. 'The inflation outlook is at the borderline of acceptable and perhaps moving beyond,' Lacker told reporters. 'In circumstances like that, containing inflation has to be the primary focus.'"

"'Core CPI is clearly running near or above the upper end of the FOMC's comfort zone,' former Fed governor Laurence Meyer said yesterday. 'We now expect the committee to move to 5.25 on the funds rate' in June."

"A Federal Reserve economist on Thursday will say Fannie Mae and Freddie Mac help lower U.S. mortgage rates by only two basis points, below his previous estimate of seven basis points, sources said. Critics of the shareholder-owned but government-sponsored enterprises argue that they benefit in financial markets from implicit government backing, but do not pass that benefit on to homebuyers."

"Due to Wall Street's belief that the federal government would bail the companies out in a crisis, Fannie and Freddie can borrow at lower rates than other companies."

"The suggestion that the companies fall short in their primary task of promoting homeownership comes as Congress considers toughening oversight after multibillion-dollar accounting problems at both Fannie Mae and Freddie Mac."

"Hooker Furniture Corp. said it expects lower fiscal second-quarter sales than it previously forecast. 'A softening in business at retail has dampened our expectations for the current quarter,' said Paul Toms Jr., chairman and CEO. 'We believe this decline has been precipitated by rising energy prices and a decrease in housing activity.'"

"Shares of Clayton Holdings Inc., which analyzes mortgage loans for mortgage-backed securities traders, fell in afternoon trading Wednesday after an analyst said the company is vulnerable to a downturn in the cooling real estate market."

"While Jeffrey has a positive outlook for the future of the mortgage loan market, the company is exposed to a downturn. Softening real estate prices and rising interest rates pose risks not currently reflected in Clayton's share price, Jeffrey said."

"'Clayton has never operated through a significant down cycle or a period marked by limited liquidity or less-ready access to the capital markets,' analyst Andrew Jeffrey wrote. 'It is our opinion that a financial market disruption and/or a sharp rise in interest rates over a short period of time, accompanied by declining real estate values, could cause such a disconnect.'"

"Jeffrey also cited concerns that management was hastily assembled and has not had enough time to gel and familiarize itself with the company and its market. Executives also do not have significant personal equity ownership in the company, Jeffrey said."

"Clayton provides transaction services such as loan analysis and home value validation for traders in the market for mortgage-backed securities, especially home loans known as 'non-conforming mortgages.' In 2005, the company analyzed 930,000 non-conforming loans totaling more than $175 billion in principal, or 9 percent of the total non-conforming mortgage loan originiations in the period."

"As of the end of 2005, the company was monitoring $308 billion in loans underlying mortgage-backed securities, or 19.4 percent of the total non-agency mortgage-backed security principal."