Some housing bubble reports from Wall Street and Washington. "H&R Block is due out with its quarterly earnings report today. Bob Moon: The higher that home prices climbed in recent years, the riskier the loans became for some mortgage lenders. Now, with adjustable rates going up and a growing number of borrowers failing to make their payments, H&R Block is being forced to write off a loss of $102 million."

"Christopher Thornberg 'We're at the beginning of the breaking real estate bubble, we're not at the end, we're not near the bottom. We have a ways to go.'"

"Thornberg expects a shakeout for the mortgage industry, but he can't predict which companies might be most vulnerable. 'To some extent, this is going to be one of those things where we're just going to have to let the smoke clear to find out where the bombs have landed,' he said. Thornberg has little sympathy for companies that he says have long been riding high on such high-risk loans."

The Street.com. "The hard landing of real estate has only begun to be felt, as the downturn is still less than a year old and new housing starts have dropped by only about 15% from their fall 2005 peak."

"In past down cycles, the duration of the downturn has been between 25 and 52 months, and in terms of unit declines has averaged approximately 52% from peak to trough. So, stated simply, the worst is yet to come for housing."

Gary Shilling at Forbes. "The housing bubble is deflating rapidly. I expect at least a 20% decline in median single-family house prices nationwide, and that number may be way understated."

"A bursting of the bubble would force many homeowners to curb their outlays in order to close the gaps between their income and spending growth. That is, unless another source of money can bridge the gap between consumer incomes and outlays, just as house appreciation seamlessly took over when stocks nosedived. What could that big new source of money be?"

The Boston Globe. "Rising incomes should support the US economy even as the housing market slows and consumers lose the boost they were getting from home equity, Federal Reserve chairman Ben Bernanke said."

"'The rapid pace of house price appreciation in recent years likely contributed to the decline in the saving rate,' he said. 'Similarly, the cooling of the housing market and associated reduction in capital gains on housing will probably provide some upward impetus to the saving rate.'"

From Bloomberg. "European Central Bank President Jean- Claude Trichet signaled the bank will increase interest rates in October, saying economic growth and inflation will exceed its previous forecasts."

"'Strong vigilance remains of the essence so as to ensure that upside risks to price stability are contained,' Trichet said. The ECB said it expects inflation to stay 'elevated.'"

CNN Money. "A year ago, with the real estate market booming and stocks at or near all-time highs, executives at the 12 major homebuilders were quick to cash out, selling just over 6.5 million shares of their stock as a group, pocketing just over $500 million in proceeds."

"But homebuilder executives have held onto their shares this summer, while their value has continued to fall. 'This definitely tells me insiders are relative more bullish than a lot of investors in these stocks. But that being said, we're not seeing any buying. If they really wanted to show the faith, they could be buying shares,' said Jonathan Moreland, director of research at a service that tracks insider stock activity."

From USA Today. "As sales slow and inventories jump, large publicly traded home builders are trimming landholdings or renegotiating deals, according to earnings reports and industry officials."

"The development illustrates the fact that some previous land deals done at the height of the housing boom no longer make business sense. It also reflects the fact that builders see the slower market as giving them leverage to force sellers to cut prices."

"'Land sellers are at a disadvantage right now, and some, because of the way they're financed, can't really hold on and wait for the market to normalize,' says Mackey O'Donnell, CEO of the largest land-acquisition firm in California. Builders tell O'Donnell they are seeing up to 10% to 20% reductions in land prices from recent highs. As large builders reduce their holdings."

"Toll Bros. said in its third-quarter earnings report last week that it now owns or controls about 82,900 lots, compared with 91,200 at end of the second quarter. 'Those deals that are not at the extremely profitable end of the spectrum are being looked at again,' says Kira McCarron, for Toll Bros., adding that if they don't add up and 'can't be renegotiated, then they would be dropped.'"