Some housing bubble news from Wall Street and Washington. "Fewer Americans signed contracts to buy previously owned homes in January, suggesting lingering weakness in the housing market. The index was 8.9 percent below the year-earlier level, the National Association of Realtors said today in Washington. The index of pending home resales is considered a leading indicator of sales because it tracks contract signings."

"'We are seeing temporary near-term weather disruptions in much of the country, but there is an underlying pattern of stabilization in the housing market,' said David Lereah, NAR’s chief economist. 'The rapid shift in January to frigid air in much of the country had a cooling affect on home shopping that went beyond normal seasonal factors,' Lereah explained. 'Weather disruptions have continued since.'"

From Bloomberg. "General Motors Corp., the world's largest automaker, may take a charge of almost $1 billion to cover bad mortgage loans made by its former home-lending unit, according to a Lehman Brothers analyst."

"Residential Capital LLC relies on loans to people with poor or limited credit records or high debt burdens, for more than three-quarters, or $57 billion, of its loan portfolio, Lehman analyst Brian Johnson wrote in a research report. Delinquency rates on such subprime loans made last year are at a record high."

"GM may have to spend as much as $950 million to make up the difference between the original value of the finance unit and any losses for subprime loans made by ResCap, he said."

"About 13 percent of the subprime loans backing bonds issued in 2006 and rated by S&P are delinquent, with 6.65 percent of the loans behind in payments by 90 days or more, according to Standard & Poor's."

"ResCap may have lost $160 million to $520 million in the fourth quarter because of subprime mortgages, Citigroup Inc. analyst Jon Rogers in New York said on Feb. 28. Credit-default swaps for ResCap gained 23.2 percent to $219,370 yesterday, their highest since July 2005. GMAC credit- default swaps jumped 25 percent yesterday to $204,630 and have more than doubled this year."

"ECC Capital Corporation today announced that on March 1, 2007 it was notified by the New York Stock Exchange that it has fallen below the NYSE's continued listing standard relating to minimum share price."

"ECC Capital Corporation, headquartered in Irvine, Calif., is a mortgage real estate investment trust that invests in residential mortgage loans. ECC Capital is currently structured to qualify as a REIT by managing a portfolio of nonconforming loans it originates or acquires."

National Mortgage News. "Domestic Bank of Rhode Island closed its wholesale division Monday, citing Wall Street's reluctance to bid any higher than 97 on certain nonconforming loan types it specialized in."

From CNN Money. "Lending to homeowners and buyers without good credit has suddenly become a very bad business, and possibly a very big problem for the U.S. economy as a whole."

"Subprime mortgages pumped $640 billion into the economy through facilitating home purchases and refinancings in 2006, according to trade publication Inside B&C Lending. That's nearly twice the level of this kind of lending seen as recently as 2003."

"'Everyone in the subprime sector this year is going to lose money,' said analyst Bose George. 'They're getting squeezed on all sides. Going into the year, we were looking for a decline of 15 percent [in subprime lending], but clearly now that is far too low. It's now looking like a 25 to 30 [percent] decline.'"

"Some economists say that choking off more than $100 billion in home financing will cause problems for real estate and home prices overall by keeping some buyers out of the market and by forcing some current homeowners to sell or face foreclosure."

"'People who a year ago could have purchased a house with a subprime mortgage aren't going to be able to purchase,' said Paul Kasriel, chief economist with Northern Trust in Chicago. 'Increased foreclosures will mean more inventory on a market that already has a glut of homes for sale.'"

"'Housing has played a very large role in this expansion and one of the reasons it's played that role is there has been a change in the mortgage market,' he said. 'This has been a credit-induced housing boom that lifted other sectors of the economy and it's all in reverse now.'"

"Orders to U.S. factories fell by the largest amount in 6 1/2 years in January, reflecting widespread declines across a number of industries."

"The Commerce Department reported that total orders dropped by 5.6 percent in January, the biggest decline since July 2000, a period when the economy was slowing sharply in advance of an actual recession which began in 2001."

The Missoulian. "The family-owned Pyramid Mountain Lumber Co. has cut wages by 10 percent across the board and plans to lay off 10 workers, company officials said. The company blames the depressed lumber market, which has caused massive layoffs and shutdowns at mills across the country."

"'The way prices have been for the last six to eight months, I don’t think anybody is doing well,' said Loren Rose, the company’s controller."

"Goldman Sachs Group Inc. and Lehman Brothers Holdings Inc. would be hardest-hit on Wall Street if the slump in subprime mortgages becomes a credit crisis like the one that followed Russia's debt default in 1998, Sanford C. Bernstein & Co. analyst Brad Hintz said."

"'If we experience a crisis similar to the Russian Default/LTCM event in 1998, we can expect Goldman Sachs and Lehman Brothers to experience the largest annual decline in net revenues, net income and return on equity among the large domestic security firms,' Hintz wrote."

"Congress is gearing up for hearings on predatory lending, the latest chapter in its long history of barn-door-closings on already-departed horses. The subprime lending market is in trouble as borrowers who are, by definition, poor credit risks live up to their reputation."

"'Investors were irrationally exuberant' at the same time 'lenders and brokers were given incentives, a big pay package, to get customers into subprime loans,' says Andy LaPerriere, a managing director at the ISI Group in Washington."

"Innovation may have made it easier to mislead,' he says. 'But the key driver was the willingness on the part of lenders and mortgage purchasers to take on high risk, which will turn out to be a big mistake.'"

"During a bubble, be it in the stock market or real estate prices, we want the government to stay out of the way. The bust produces finger-pointing, congressional hearings and new regulations."

"The word 'predatory,' with all its negative connotations, is popping up elsewhere; specifically, to describe loss- mitigation practices. There is nothing predatory about 'improving the collectability of the loan,' says Scott Valentin, managing director, specialty finance research, at Friedman, Billings, Ramsey & Co."

"The problems in the subprime market may be just the tip of the iceberg, given the depth and duration of the housing bubble -- and the money tied up in it. 'We've created an unproductive asset,' says Joe Carson, director of global economic research at AllianceBernstein. 'A house doesn't produce income.'"

"Mortgage debt rose by $4.7 trillion from the end of 2000 through the third quarter of 2006, according to the Fed's Flow of Funds report. 'We created as much debt in housing in the last six years as we did in the prior 50,' Carson says."

The Chicago Tribune. "James Bianco of Bianco Research in Chicago notes that the deterioration in the subprime mortgage market has been under way and known for months. Why, then, was the story an element in a slide in stock prices that began just a week ago, he asked."

"'It makes you wonder if we shouldn't go back and say what's really going on here,' he said."

The Motley Fool. "On March 2 of this year, federal banking regulators expressed their concerns that homeowners who buy or refinance using adjustable-rate mortgages may not understand these products' associated risks."

"They didn't say this on March 2, 2002. Not March 2, 2003, 2004, 2005, or 2006. But in 2007."

"It's unbelievable to me that regulators have the gall to come out with this now. Were they not in on the little jokes about the products that mortgage banks and brokers were selling? The so-called 'liar loans'? Appraisal fraud? Degradation of credit requirements, the 103% LTV loans, any of this?"

"Unless I'm mistaken, any and all new rules will be promulgated by the same regulators who waited until everyone on the planet knew that there was irresponsibility going on in the housing market to mention it."

"In this case, the cow's out of the barn, out of the paddock, and truth be told, no one remembers the last time they saw her 'round these parts. Rumor has it she's living in a flophouse in Passaic. I hope the mortgage isn't delinquent."