Some housing bubble reports from Wall Street and Washington. Paul Muolo, "This past week Merrill Lynch declared that housing is in a bear market and that a 'buyer's market' for homes should last for 'years.' Merrill notes that the unsold inventories of homes continues to pile up, and that resale prices are flattening in the single-family market, while declining for condominiums."

The Associated Press. "More and more developers are canceling or delaying condominium projects as home sales slow, construction costs soar and lenders balk at financing units that might not sell. What's making the situation worse is a glut of high-priced condos and too few people who can afford them."

"In Philadelphia, a city cluttered with condominium construction, Old City 205 won't break ground after the housing market softened and increasingly picky buyers balked at its price tags from $400,000 for a studio to over $2 million for a three-bedroom penthouse."

"'We've gone through the biggest real estate boom in the last eight or nine years and some of these projects haven't started yet. Do you think they're going to start building now?' said real estate executive Allan Domb, dubbed Philadelphia's 'condo king.' Domb in Philadelphia said he's gotten half a dozen phone calls the past four weeks from developers asking if he would like to buy their properties."

"A big part of the problem is that many condo projects are priced high, in part because developers have to recoup the high prices they paid for land. But most buyers can't afford it. 'The sweet spot of the market is probably $250,000 to $700,000,' Domb said. 'That's what the majority of the population can afford. Many condos are priced higher. That's part of the problem.'"

"As if investors in homebuilding stocks need more to worry about. Now add this concern: Companies writing down their land values because they aren't worth what they paid for them. It's not a matter of if that could happen, but how serious and widespread those write-downs turn out to be."

"Not only would that reduce already weak earnings, but it could lead to further erosion in the 'book value' of many homebuilders. Analyst Rick Murray notes that during past housing-cycle slumps several builders took impairment charges totaling as much as 5 to 10 percent of their book value on an annual basis for several years."

The Washington Post. "The current federal funds rate is 'in a vicinity' of the right level even though news on inflation has been 'disappointing,' San Francisco Federal Reserve President Janet Yellen said on Monday."

"'It might be thought that policy should continue to tighten until the inflation data move back to a rate consistent with price stability. But I would argue that a gradual approach is likely to be better,' said Yellen, a voting member of the Federal Open Market Committee this year."

"Yellen said the two-year string of rate increases..should cut demand in interest-rate sensitive sectors such as housing, autos and consumer durables. In particular, 'significant moderation in the rate of house-price appreciation' is likely to restrain growth, she said."

From Bloomberg. "Federal Reserve Bank of St. Louis President William Poole said he's undecided on whether the central bank should raise interest rates at its next meeting in eight days. Poole (described) his stance as '50- 50. I'm still totally noncommittal.'"

"Recent data show slowing economic growth, while inflation has 'tilted' upward, Poole said. Containing inflation is the Fed's 'primary' goal, he added."