Some housing bubble reports from Wall Street and Washington. CNN Money, "Home building activity rebounded from a six-year low in November but builders' applications for future projects fell to the lowest in nine years, the government said Tuesday in a report suggesting the worst is not over for the housing market."

"Builders started work on new homes at an annual pace of 1.59 million in November, up from the 1.49 million rate in October, which had been the lowest reading since July 2000, the Commerce Department reported."

"Building permits, which are seen as a measure of builders' confidence in the market, fell to an annual rate of 1.51 million from a 1.55 million pace in October. That was the lowest building permit level since December 1997."

"'The market in general is heading downward," said (economist) Dean Baker, who's long maintained that the runup in prices and building in recent years has caused a market bubble. 'There is a very big supply of new homes. Vacancy rates for owner-occupied units are at a record high. You have tremendous oversupply.'"

"Economist Paul Kasriel said that housing starts were off 27.8 percent in November from a year earlier, the biggest year-to-year decline since a 32 percent drop recorded in March 1991."

"'There still is a lot of excess inventory, [in] both new and used homes,' he said, adding that builders are cutting prices to move homes. 'They're working through inventory and they're not going to be eager to go out and start a lot of homes right now. I don't think we're at the bottom of this yet.'"

From Bloomberg. "Construction of single-family homes rose 8.1 percent in November to a 1.281 million rate, today's report showed. The increase in housing starts was led by a 19 percent gain in the South. Starts rose 8.5 percent in the Northeast and fell 8.1 percent in the West and 6.3 percent in the Midwest."

"The slowdown in housing is beginning to cost jobs. Builders shed 29,000 workers in November following 26,000 construction jobs lost the prior month, according to the government."

From MarketWatch. "Hovnanian Enterprises Inc. reported a fiscal fourth-quarter loss late Monday as the home builder struggled to quell the effects of a U.S. residential real estate slowdown."

"'We did not anticipate the suddenness or magnitude of the fall in pricing that occurred this year in many of our communities,' CEO Ara Hovnanian said. 'Our profitability and the pace of new home sales in our markets continues to be adversely impacted by high contract cancellation rates, increases in the number of resale listings and increases in the number of new homes available for sale.'"

"Hovnanian's contract cancellation rate for the fourth quarter was 35%, compared with 25% in the fourth quarter of 2005 and a 33% rate in the third quarter of fiscal 2006, he noted."

"The company walked away from $141 million in land deposits and predevelopment costs and took impairment charges of $174 million during its fiscal fourth quarter, CFO J. Larry Sorsby said. 'Although it is painful to incur these write-offs, we believe it is much better than proceeding to build-out these communities at very low returns or losses over the coming years,' he explained."

"Total inventories stood at $4.07 billion at the end of October, Hovnanian reported on Monday. That's down from $4.65 billion at the end of July. Hovnanian noted some 'hopeful indicators' from the past two months, such as modest declines in resale inventories, improving consumer confidence and 'healthy' levels of buyer traffic at many of the company's communities."

"Many analysts and economists who follow builder stocks and the housing market aren't sold that a recovery is on hand. During Toll Brothers's latest quarterly earnings call, one analyst skeptical of management's rosier view even asked which flavor of Kool-Aid executives were drinking."

"At Hovnanian, management 'seems optimistic that the housing market is on the verge of bottoming, but we continue to believe that it is too soon for such a call, and that pricing pressures are likely to extend the pain in builder earnings through next year,' wrote Deutsche Bank analyst Nishu Sood."

"The analyst thinks the housing downturn 'so far has defied conventional indicators, and we think it will persist through the spring selling season in the form of continued home-price declines, especially as pricing in the existing housing market begins to give way more meaningfully.'"

"Morgan Stanley economist Richard Berner wrote in a recent note that 'these hopeful signs may be false dawn for housing demand.' Said Berner: 'So while the intensity of the sales decline is lessening, and the process of adjustment is well under way, builders will have to cut construction significantly further to reduce inventories of unsold homes.'"

The Associated Press. "Alex Barron, who follows homebuilders for JMP Securities, said the industry will get worse before it gets better. He said with so much inventory, builders like Hovnanian must cut their prices to compete."

"'Until those inventory levels come more in line with historical levels, it's going to be very difficult for builders to show an improvement,' he said. While Hovnanian posted a large write-off, he said the company is being more realistic than other large homebuilders 'about how deep this current downturn is.'"

"The government on Monday filed civil charges against former Fannie Mae chief Franklin Raines and two other top executives, accusing them of misconduct costing shareholders billions of dollars."

"The Office of Federal Housing Enterprise Oversight announced that it is seeking fines and the return of millions in bonus money. It filed 101 charges against Raines, former chief financial officer Timothy Howard and former controller Leanne Spencer."

"Raines and Howard were swept out of office two years ago in the multibillion-dollar accounting debacle at the government-sponsored company, which finances one of every five home loans in the United States."

"The lawyer for Raines called OFHEO Director James B. Lockhart 'a fatally biased regulator' and asked him in a letter to remove himself 'immediately and completely from any further regulatory action affecting Mr. Raines.'"

"Lockhart's true motivation in the charges is to get Congress to enact legislation tightening the government reins on Fannie Mae and Freddie Mac, its smaller sibling in the $8 trillion home-mortgage market, said Raines's attorney, Kevin Downey."

"Howard's attorney, Steven Salky, called the allegations against his client 'a politically motivated attempt to rewrite history.' Spencer's lawyer, David Krakoff, said that her annual performance reviews for the six years she was controller 'found her work was nothing short of outstanding.'"

From Reuters. "The three executives were at the helm when improper bookkeeping was used to 'grow Fannie Mae in an unsafe and unsound manner' and sparked an accounting scandal that erased billions of dollars in shareholder value, according to the suit."

"The regulator said it was seeking penalties and bonuses that could exceed $215 million for six years of wrongdoing."

"OFHEO decided to move against the three former executives now because a statute of limitations law might have stymied them after the end of the year, said Alfred Pollard, the chief counsel to OFHEO. Besides Monday's suits, OFHEO is reviewing the conduct of other current and former employees for wrongdoing."