Some housing bubble news from Wall Street and Washington. Paul Muolo, "Speaking before the National Association of Home Builders last week, Countrywide Home Loans chief Angelo Mozilo voiced his concern that some states may dictate 'suitability standards' that could force mortgage bankers to make loan choices for borrowers, a proposition he finds alarming."

"Preliminary survey numbers are starting to roll in, and it's looking like the third quarter was a challenge for many lenders. Meanwhile, according to exclusive research conducted by NMN, payment-option ARM and interest-only loan production now accounts for almost 30% of industrywide fundings."

The Washington Times. "The Commerce Department released dataMonday, on U.S. personal savings. The savings rate, personal savings as a percentage of personal disposable income, was minus 0.8 percent, 0.5 percent and 0.2 percent in July, August and September."

"'With housing prices falling and household wealth shrinking, savings should continue to improve,' economist Peter Morici, of the University of Maryland, said. 'Home purchases will be viewed as less of a near-term speculative investment, and individuals will be more likely to spend less on new homes.'"

From Bloomberg. "U.S. economic growth cooled to a 1.6 percent pace in the third quarter, the weakest pace in more than three years. Most of that slowdown came from a drop in construction spending and a wider grade gap. 'We are feeling the effects of the housing bubble bursting and while the ill wind is not pleasant, it is not likely to be long-lasting,'' said Joel Naroff, president of Naroff Economic Advisors

"Markets around the world are awash in excess cash, fueling a frenzy of investment from London to Tokyo that may lead central banks to push interest rates higher than investors now anticipate."

"'Interest rates in the main economies have still not been raised enough,' says Tim Congdon, visiting fellow at the London School of Economics and one of the 'wise men' who advised the U.K. Treasury in the 1990s. 'here is a buoyancy in asset prices one gets with high-risk monetary growth.'"

"Tim Drayson, global economist at ABN Amro Holding NV in London, says major central banks will all have to tighten credit more than investors now assume. 'Money supply on a global basis is growing quite rapidly as is overall credit growth,' says Drayson, a former U.K. Treasury economist. 'We don't see much evidence that monetary policy around the world is restrictive.'"

From MarketWatch. "The U.S. economy is strong enough that further interest-rate increases wouldn't push it into a sharp downturn, said Jeffrey Lacker, the president of the Federal Reserve Bank of Richmond, on Monday. 'The economy is resilient enough to withstand further tightening,' Lacker said."

"Lacker said he was not far out of the mainstream of Fed officials. 'I'm unhappy with inflation where it is now and I've heard several other members say the same thing. So I think there is a broad consensus,' Lacker said."

From Reuters. "Bank of Canada Governor David Dodge rapped the government housing agency last summer for fueling inflation with new mortgage insurance products, according to a letter released by the central bank on Monday."

"Dodge told CMHC President Karen Kinsley he was dismayed with a June press release announcing the agency was offering mortgage insurance for interest-only loans and for amortizations of up to 35 years. 'At a time when the housing market is already overheated, further fuelling demand through CMHC actions would only put further upward pressure on prices and thus make housing less, not more, affordable for Canadians,' Dodge said in the letter."

"The central bank explicitly said high housing prices were a key risk to its inflation outlook in July, when it updated its monetary policy report."

"CMHC's press release also hinted it would look for ways to reduce the cost of accessing financing for house buyers, a development Dodge said would be 'very unhelpful' at a time when housing prices are rising faster than all other items in the consumer price index. Dodge's concerns dissipated after meeting with Kinsley, central bank and CMHC officials said."

From theStreet.com. "Land writedowns, along with continued aggressive discounting of homes, helped cut Pulte Homes and Centex's quarterly earnings in half last week. But another looming hit to gross margins has yet to fully materialize in the homebuilding sector."

"Homebuilders enjoyed record profit margins because they were generally building on cheap land that was priced before the boom. Builders are currently 'working off all their old cheap land, but eventually they've got nothing but the more recent stuff,' says A.G. Edwards analyst Greg Gieber."

"'If you look at land controlled by homebuilders, either owned or optioned, of the group I follow, 35% of those lots were priced in 2005,' Gieber says. And a year ago, land prices remained high. Now builders are taking charges and walking away from options on that more expensive land, as Pulte and Centex did last week."

"But much of that newer land is still on the builders' books. This creates a tough dilemma for the companies. They can either build on their most recently purchased land and possibly lose money as housing prices fall or go flat over coming years. Or the companies can continue to write down their land and walk away from option contracts, as builders like Pulte and Centex continue to do."