Some housing bubble reports from Wall Street and the Washington Post. "Construction activity in October plunged by the largest amount since the recession in 2001 as home building fell for a record seventh consecutive month. It was the biggest decline since a similar 1 percent drop in September 2001."

"Residential construction fell for a seventh month in October, the longest stretch of weakness on record. The 1.9 percent drop in this category in October was the biggest decline since July."

The Chicago Tribune. "New-home sales data startled investors this week, declining more than expected, and leaving many economists speculating whether the housing downturn would drift through the economy."

"'The absolute number of homes on the market has peaked,' economist Ian Shepherdson said. 'But that is not enough; home builders need to reduce inventory drastically. There is a long, long way to go.'"

"'The housing downturn is a very big deal for the U.S. economy,' because of how it spills into multiple industries, economist Stephen Roach said. Among them: a contraction in construction, cutbacks in buying such things as furniture and appliances, mortgage finance companies and real estate brokers struggling for business, and what's called 'a negative consumer wealth effect.'"

"Although jobs are firm, Roach is not impressed. In the last 58 months compensation has climbed only 16 percent versus the usual 23 percent during a typical economic expansion. 'With the home-building sector now moving into recession, a renewed cyclical shortfall of labor income should be increasingly evident in the months ahead,' he said."

From Bloomberg. "H&R Block Inc. posted its worst loss in at least 17 years during the second quarter because of a slump at its mortgage unit, which the company is trying to sell. The company's net loss almost doubled to $156.5 million in the quarter ended Oct. 31, compared with a loss of $81.2 million a year earlier, H&R Block said."

"The mortgage unit lost money in the quarter after H&R Block wrote off $102.1 million linked to home loans during the first quarter. 'Ongoing weakness in the mortgage industry' reduced profit in the second quarter, CEO Mark Ernst said."

"Revenue from the company's mortgage business was almost halved to $140.6 million, because of lower originations and higher provisions for loan losses. The unit had a pretax loss of $39.0 million, versus pretax income of $46.2 million a year earlier."

"The mortgage bond market is beginning to buckle under the weight of the worst U.S. housing slump in six years. Yields on so-called sub-prime mortgage securities rated BBB have risen to 6.52 percent on average from 6.28 percent on Sept. 5, data compiled by Bank of America Corp. show."

"About 3.3 percent of the $160 billion in sub-prime loans made this year through July have payments that are more than two months late, the highest ever for mortgages in their first year, according to New York-based Fitch Ratings."

"'The higher delinquencies do set off an alarm for many people and make us more conservative,' said Alex Wei, a senior VP at Delaware Investments, which has about $100 billion in bonds including mortgages."

"When the housing market was setting records in sales and prices last year, securities backed by floating-rate sub-prime mortgages returned 3.9 percent including reinvested interest, almost double the 1.97 percent gain for investment-grade corporate bonds, according to Merrill Lynch. Sub-prime mortgage securities have returned 1.38 percent in the past three months, less than half the 3.63 percent return for corporate debt."

"Sub-prime lenders are paying more in interest on the bonds they sell to fund mortgages. Interest expense for New Century Financial Corp. rose 29 percent to $375 million in the third quarter from a year earlier. Accredited Home Lenders Holding Co.'s jumped 62 percent to $138 million. Fieldstone Investment Corp's payments climbed by 57 percent to $91 million."

"Late payments are accelerating after lenders began to require less documentation for loans and financed more homes without down payments, Bear Stearns analyst Gyan Sinha said. About 38 percent of the most common sub-prime mortgages this year were for the full value of the home, up from 31 percent in 2005 and 21 percent in 2004, according to Bear Stearns."

"Sinha said 45.5 percent of the loans this year required 'low documentation' of borrower income and net worth, up from 44.5 percent in 2005 and 40.1 percent in 2004. The data reflect 'common methods of allowing first-time homebuyers to borrow more than they can afford,' Sinha said."