Some housing bubble reports from Wall Street and Washington. "In another sign the housing recovery may still be on hold, Lennar Corp. said Tuesday it anticipates posting a fourth-quarter loss on a tough market and land charges. It anticipates quarterly charges in the range of $400 million to $500 million as a result of real estate valuation adjustments and land options it's walking away from."

"'Market conditions continued to weaken throughout the fourth quarter and we have not yet seen tangible evidence of a market recovery,' said CEO Stuart Miller."

"The company said although deliveries increased in 2006, it saw 'materially lower' gross margins on home sales 'as a result of deteriorating market conditions in the home-building industry.'"

"'We have continued to focus on strengthening our balance sheet by delivering our backlog, selling inventory aggressively and renegotiating our land positions,' Miller added."

The New York Times. "Five years ago, the United States economy went through a recession that did virtually no damage to the housing market. In 2007, the question is whether the economy can emerge unscathed from a housing recession."

"In the bond market, however, the outlook was cloudy at best. Prices in the futures market showed that investors expected that the next move by the Federal Reserve would be to reduce the interest rate it has raised 17 times since mid-2004. That indicates worry about a slowing economy. And another traditional indicator, the yield curve, says the same thing."

"So the stock market says a boom is here and is going to stay, housing notwithstanding. And the bond market expects a recession — but one that does not damage those who are financially stretched before it begins."

"'We think of markets as forecasters,' said economist Robert J. Barbera. 'But it is very hard to come up with a model' that makes sense of the current forecasts."

"With prices falling in some regions, home builders reported a surge of cancellations of purchase contracts. Housing starts plunged, and although starts showed a reassuring increase in November, newly issued permits to build new homes continued to decline."

"Oddly enough, rising home sales could be a bad sign in 2007, particularly if prices continue to sag. A surge in sales of existing homes could be an indication that people were being forced to sell."

From MarketWatch. "Brian Diez entered the mortgage business after a career as a stockbroker, figuring the field would offer him an altruistic benefit, helping families buy their first homes. He learned quickly, however, that not every one of his fellow brokers had their clients' best interests at heart."

"'What became clear to me is every company was really interested in selling as many loans as they can, and not really helping clients,' said Diez, sales manager in Oceanside, N.Y.'

"The 'dirty tricks' he has seen and heard of range from brokers steering clients into products clearly unsuited for them to shady switcheroos at the closing table."

The Center for Economic and Policy Research. "The big question for the U.S. economy now is whether we will make it through 2007 without a recession. Most of the top economic forecasters are predicting a 'soft landing,' which means the economy will slow but not so sharply as to cause a recession."

"But almost all of these same experts failed to forecast the last recession, and they missed the stock market bubble, the largest financial asset bubble in history. And most of them also missed the housing bubble until it began to burst."

"As this housing wealth disappears, people cut spending. We have already seen an enormous drop in the amount that people borrow on their homes, from $600 billion in 2005 to about $350 billion for 2006."

"We could possibly get through the international imbalances for another year but the housing bubble collapse is already upon us, with November's housing starts down 25 percent over the past year, home sales plummeting, and home prices falling."

"This is something that our political leaders and policy-makers should have warned people about, rather than encouraging the same kind of speculative excess that dominated our economy during the late 1990s stock market bubble."