Some housing bubble news from Wall Street and Washington. Bloomberg, "Home starts unexpectedly climbed 4.5 percent last month from November, the Commerce Department said in Washington. Building permits jumped 5.5 percent, the most in four years, to a 1.596 million pace, the Commerce Department said."

"Even with last month's gain in housing starts, residential construction dropped 13 percent for all of last year, the biggest yearly decline since 1991, to 1.801 million." "Construction of single-family homes fell 4.1 percent last month to a 1.23 million rate, today's report showed. Work on multifamily homes, such as townhouses and apartment buildings, surged 42 percent to an annual rate of 412,000."

"'The housing market has reached stabilization, but I would not be surprised to see some weaker numbers going forward,' said Phillip Neuhart, an economist at Wachovia Corp. Favorable weather allowed some builders to get an early start on projects, 'pushing the headline number up.'"

From CNN Money. "For the full year, single-family home building sank 15 percent and units in buildings with five or more residences slipped about 6 percent."

"Bernard Markstein, director of forecasting for the National Association of Home Builders, said that the multi-family housing starts can swing widely from month to month. Markstein said for that reason his group is focused on the continued weakness in single-family homes. Starts on single-family homes last month were the second lowest since early 2001, ahead of only last October."

"'Getting a permit doesn't mean they'll start building tomorrow, but maybe three to six months from now they'll start some projects again,' said Markstein. 'It's definitely a very weak market. There's clearly still too much supply on the market.'"

From Reuters. "Lack of progress in reining in mortgage lenders Fannie Mae and Freddie Mac leaves the economy at risk of possible financial crisis, St. Louis Federal Reserve Bank President William Poole said on Wednesday."

"In a toughly worded address to a financial analysts' group, Poole said the so-called government-sponsored enterprises or GSEs still need reform, including making clear to investors there is no government guarantee if they get in trouble."

The Wall Street Journal. "A federal district court judge ruled that a Maryland bank must rescind loans made to certain borrowers who took out so-called option adjustable-rate mortgages because it violated the Federal Truth in Lending Act."

"The ruling comes at a time of heightened scrutiny of option ARMs and other nontraditional mortgages, which grew in popularity during the housing boom."