Some housing bubble news from Wall Street and Washington. MarketWatch, "Pulte Homes Inc. swung to a quarterly loss late Wednesday, as the homebuilder took charges to reduce its land inventory in a slumping housing market. The homebuilding pretax income included about $350 million of land-related charges and impairments, the company said."

"'Our earnings visibility going forward remains limited due to rapidly changing market conditions and uncertainty regarding possible future land- related charges,' said CEO Richard Dugas. 'For the first quarter of 2007, we are providing earnings guidance in the range from break-even to a loss of $.10 per diluted share, exclusive of any additional land-related charges. Given this fluid environment, we are not in a position at this time to provide full-year guidance for 2007.'"

"Pretax margins as a percentage of home settlement revenues for 2006 decreased 880 basis points to 7.2%, reflecting a 600-basis point decline in gross margins from home sales, and lower profitability on land sales. Net new home orders for the fourth quarter were 6,446 homes, valued at $2.1 billion, which represent declines of 34% and 38%, respectively, from prior year fourth-quarter results."

"Pulte Homes' backlog as of December 31, 2006, was valued at $3.6 billion (10,255 homes), compared with a value of $6.3 billion (17,817 homes) last year. The cancellation rate, declined to 34.7% in the fourth quarter from 35.8% in the third quarter."

The Motley Fool. "Fewer homes are selling at lower prices and that's a margin-crushing disaster for real estate developers like Pulte. For all of 2006, earnings fell to less than half of what Pulte earned in 2005."

"As a telling sign that homebuilder vision isn't exactly 20/20, back in June, Pulte was looking to earn between $4.70 a share to $5.00 a share in 2006."

"Maybe that's why I'm skeptical when I hear homebuilders call bottom. Backlogs are still diminishing at homebuilders, and cancellations continue. Over at Pulte, the company is closing out the period with a backlog of fewer homes, and at home sale prices that are $5,000 lower, than at this point last year."

"When will that recovery happen? The only thing I know is that the least credible sources on pegging a turnaround are the homebuilders themselves."

"The Federal Open Market Committee latest policy statement shows that members are 'clearly hawkish' and are 'proving themselves to be ever so vigilant about inflation,' said Gregory Miller, chief economist at SunTrust Banks."

From Bloomberg. "In the year since Ben Bernanke became chairman of the Federal Reserve, the nation's central bank has led a push by regulators, including the Comptroller of the Currency and the Office of Thrift Supervision, to raise mortgage lending standards, making it tougher for borrowers to get a loan."

"Reducing the number of people who can secure a mortgage also may threaten the recovery of the U.S. housing market that the National Association of Realtors is predicting for the end of 2007."

"'The sub-prime wholesalers who used to be banging on the door have been conspicuously absent in the last few months,' said Keith Shaughnessy, president Foundation Mortgage Corp."

"Underwriting standards for sub-prime loans have been too low for at least a year, resulting in loans being issued to borrowers who have little chance of paying them back, Shaughnessy said. That will hurt the insurance companies, pension funds and asset- management firms that are holding some of the U.S.'s $6 trillion of mortgage-backed securities in their portfolios, he said."

"'There's a monster beneath the surface of the financial markets,' Shaughnessy said. 'No one knows when or where the credit crisis is going to rear its ugly head.'"

"Investors are demanding an average 1.6 percentage points more than benchmark rates to buy BBB-rated bonds backed by sub- prime mortgages, up from about 1 percentage point in August, data compiled by Barclays Capital show. Investors seek 'significantly' higher yields to own the securities whose underlying borrowers struggled to meet their obligations within a year of taking the loan, according to Barclays Plc."

"Since July, when ABX indexes based on 20 sub-prime mortgage securitizations created in the first half of 2006 debuted, the annual cost of credit-default-swap protection on BBB bonds bought with contracts tied to one of the indexes has about doubled to more than 3 percentage points, according to Barclays."

"The percentage of borrowers as of September who had fallen at least two months behind on sub-prime mortgages taken out last year was the highest ever, twice the average, according to data compiled by UBS AG."

"FMF Capital Group is a residential mortgage lending company that originates and funds primarily nonconforming or 'nonprime' mortgage loans in the United States and sells those mortgage loans to institutional loan purchasers."

"Today the Board of Directors has accepted the resignation of Edan King as Co-CEO of FMF Capital Group effective January 31, 2007. Robert Pilcowitz will continue to serve FMF Capital Group as CEO and will waive his compensation until further notice."

"FMF Capital LLC, the operating company, has continued to tighten its mortgage lending guidelines and reduced its corporate staffing levels in response to mortgage industry developments and institutional investor requirements."

The Daily Advertiser. "Martco is closing its oriented strand board plant here, company officials said. The closure will eliminate about 190 jobs, according to Martco Limited Partnership."

"In announcing the shutdown, officials noted that in the past six months 'the nationwide housing market has plummeted and is not expected to rebound in the near future. ... Due to continuing low OSB prices and the negative financial impact of OSB operations, Martco OSB plant is ceasing operations, closing its facilities, and reducing its work force.'"

The Oregonian. "Weyerhaeuser announced Wednesday that it would close its Bauman sawmill near Lebanon on March 30, laying off 70 employees. The announcement follows Weyerhaeuser's decision in December to close two other Oregon mills: a plywood mill in Springfield, which employed 86, and a veneer plant in Coburg, which employed 42."

"The Bauman mill, built in the late 1940s, produces timber and lumber for residential and commercial construction. It is being permanently closed, Weyerhaeuser spokesman Mike Moskovitz said. 'I think everybody's surprised,' Lebanon City Manager John Hitt said. 'We hate to see those jobs go.'"

The LA Times. "Members of the Senate Banking Committee said Wednesday that they would quiz the regulator of mortgage finance company Fannie Mae about approving more than $14 million in pay for the current chief executive."

"The pay for CEO Daniel Mudd was 'astounding' since the company has not yet emerged from an accounting scandal that has so far forced the company to restate $6.3 billion in earnings from 2001 to mid-2004, Sens. Chuck Hagel of Nebraska, John E. Sununu of New Hampshire and Mel Martinez of Florida said in a statement."

"Office of Federal Housing Enterprise Oversight Director James Lockhart defended his agency's decision to endorse the pay, saying it was 'comparable' to pay for heads of similar-size banks and insurance companies."

"Still, Lockhart said, excessive pay is a concern 'because excessive compensation can lead to excessive risk-taking, and excessive risk-taking can lead to the kinds of problems they've had in the past.'"