Some housing bubble reports from Wall Street and Washington. "Lennar Corp. warned Tuesday for the second time in a month that it would miss Wall Street forecasts and its CEO said the housing market hasn't hit bottom. 'The housing market has continued to deteriorate, trailing down further and faster than anticipated,' CEO Stuart Miller said in a a statement."

"'Although the economy remains strong and unemployment and interest rates remain relatively low, it is not clear that the homebuilding downturn has yet found a floor,' he added."

"Lennar's policy has been to start a new home as soon as one is sold, with or without first finding an intended buyer and using incentives for the sale. 'Rather than slamming on the brakes, they're trying to let the business wind itself down to whatever the appropriate level is over time,' analyst Todd Vencil said. 'They are clearly adding to the problem overall to the market in having too much inventory.'"

"CEO Miller said the company has seen its cancellation rate rise to over 30%. 'Primary purchasers are either on the sidelines or demanding better pricing before purchasing,' Miller said. 'Customers in backlog are also demanding concessions or are walking from deposits.'"

"Lowe's Cos. forecast profit for the year toward the lower end of its prior view, citing near-term pressures on consumers such as a weaker housing market. 'We are not surprised..given the declines in the housing market continuing to accelerate,' Wachovia analyst Peter Benedict wrote. 'We believe there is still risk that more estimate reductions are ahead given there is no sign of the housing market reaching a bottom.'"

"Countrywide Financial Corp has confirmed that it will cut up to 10% of its 'general and administrative' work force in the coming months. A Countrywide spokesman confirmed..layoffs have already begun. One source told MW that the company has even canceled its regular practice of providing employees with free doughnuts on the last Friday of every month."

"In Southern California..home builders, real estate agents and loan brokers here are starting to feel the pain. 'Everyone is tightening their belts,' said Irene Genders, president of the California Escrow Assn. 'We're expecting this to be a little while.'"

"Andy Perkins, San Diego branch manager for Orco Construction Supply, said he believed that job losses were just beginning as housing projects finish up and builders find little or no new demand. More construction equipment is coming back to his stores rather than moving to another job, Perkins said. 'San Diego has set the trend for the business falling off the shelf' in single-family homes, he said."

"'Things are clearly turning down pretty hard' for residential real estate, said Jan Hatzius, an economist at Goldman Sachs. 'Hatzius said the risk was that housing could see a much harder landing than now appears reasonable."

"'We have never seen the kind of housing boom nationally that we've seen over the last six or seven years,' he said. 'So to know what's on the other side of the boom is very difficult.'"

"Paul Volcker, who halted a wage and price spiral as Federal Reserve chairman between 1979 and 1987, said he's worried both about inflation and pressure on the U.S. central bank to not do anything about it."

"'I am a little bit more worried about inflation,' said Volcker. ' I am impressed by the degree of pressure, if that is the right word, psychological pressure, political pressure, there is not to do anything about it.'"

"To bring buyers back into the market, sellers simply have to lower their prices, said David Lereah, the NAR's chief economist. Lereah has repeatedly cut his forecast for the housing market this year and says he's now unsure how deep the correction will turn out."

"There's now a 7.5-month supply of homes for sale, up 60% from last year. 'If we have prices drop for the rest of the year and sales also continue to drop, then we will have a bad situation in housing of balloons popping rather than air coming out,' Lereah said. Either way, he says, 'It's a buyer's market.'"