Some housing bubble news from Wall Street and Washington. Financial Times, "Toll Brothers, the largest US luxury homebuilder, on Wednesday warned that home sales might fall even further in the latest sign that the worst housing slump in 16 years has yet to reach its lowest point. The rate of new home sales in June was at its second lowest since September 1999."

"'With the uncertainties roiling the mortgage markets right now, the pace of home sales could slow further until the credit markets settle down,' said Robert Toll, CEO. 'We are now in the twenty-third month of a down housing market. Hesitant customers remain on the sidelines, unsure of whether home prices have bottomed.'"

The Wall Street Journal. "Toll's home-building revenue fell 21% in its fiscal third quarter. For the quarter ended June 30, net signed contracts declined 31%. Toll Brothers said the fiscal third-quarter cancellation rate was 24%, compared with 19% in the fiscal second quarter. Backlog for the quarter fell to about $3.67 billion, down 34% from $5.59 billion in the year-ago period."

"And Toll Brothers signed 1,457 gross contracts in the quarter, a 17% decrease from 1,760 gross contracts signed a year ago."

"We caution that, with the uncertainties roiling the mortgage markets right now, the pace of home sales could slow further until the credit market settles down,' Toll said in a written statement. 'In the near term, tightening credit standards for borrowers should reduce the pool of potential buyers: liquidity and affordability issues may impede some customers from closing, while others may find it more difficult to sell their existing homes.'"

"Toll Brothers estimates pretax writedowns related to operating communities, land and land options in the third quarter will be between $125 million and $175 million. 'Given the current state of the market, we are not comfortable giving earnings guidance," the company said."

The Associated Press. "A trade group for real estate agents on Wednesday lowered its outlook for existing home sales this year by 1 percent, or 70,000 homes, as the housing market continues to slump."

"'With the population growing, the demand for homes isn't going away it's just being delayed,' Lawrence Yun, NAR's senior economist, said in a statement. 'More buyers, and cutbacks in new construction, will eventually draw down the inventory levels and support future price appreciation, but general gains will be modest next year. Serious buyers today have a long-term view of housing as an investment _ speculators have left the market.'"

From Bloomberg. "U.S. home sales will tumble to a five-year low this year as a widening credit crunch reduces the number of buyers who can get mortgages, the National Association of Realtors said today."

"New-home sales, which account for about 15 percent of the housing market, probably will fall 19 percent to 852,000, a 10- year low, the group said. 'Mortgage disruptions will hold back sales over the short term,' Yun said in the report."

The Dow Jones Newswires. "UBS AG is telling mortgage brokers that it will no longer buy loans lacking documentation about borrowers' ability to repay, another sign that the supbrime mortgage virus has spread to the broader loan markets."

"UBS Home Finance was one of the lenders to American Home Mortgage Investment Corp., which filed for bankruptcy on Monday. Like many banks, UBS has found itself stuck with purchased residential loans it can no longer funnel to investors in the form of mortgage-backed securities."

"UBS's new policies on 'no-doc' loans went into effect last Friday. The company reiterated the policy in an email sent to clients Monday morning, a spokesman confirmed. 'UBS will only accept full documentation, alt documentation, express documentation and stated income/verified asset documentation loans,' the email said.'

"Washington Mutual Inc., the biggest U.S. savings and loan, has raised requirements for accepting so-called low-documentation mortgages."

"Washington Mutual told brokers Friday that it will no longer accept mortgages unaccompanied by traditional documentation of income or assets if the loan exceeds 65 percent of the home's value and the borrower's credit score is below 680, said Sara Gaugl, a spokeswoman for the Seattle-based bank."

"Standard & Poor's may cut its ratings on $913.9 million of mortgage securities backed by Alt-A loans because of rising delinquencies and losses that may 'exceed historical precedent.'"

"The bonds now have 'delinquency and default loss trends that are indicative of poor future performance, and these trends will continue to exceed historic precedent and our original ratings assumptions,' S&P analysts said in a report."

From MarketWatch. "Fitch Ratings said Wednesday it downgraded IKB Deutsche Industriebank AG's individual rating. 'The downgrade of the Individual rating reflects Fitch's opinion that IKB would have defaulted without the rescue measures put in place,' Fitch said."

From PBS.org. "Across the country, mortgage foreclosures are skyrocketing, home prices are dropping, 'For Sale' signs are becoming part of the landscape, and construction is slowing down, as the nation's housing slump becomes a stubborn fact of life."

"Nicolas Retsinas, director of Harvard University's Joint Center for Housing Studies; 'The problem is, we're trying to do two things at once. We're trying to make sure we don't make loans like these again, but at the same time we're trying to help people who are stuck with these loans to get other loans, again, tough to balance those two.'"

"Gwen Ifill: 'That sounds like two competing interests that you're trying to satisfy.' Retsinas: 'They are. And there's probably a way to do it, but it's not going to be perfect, and it may not always be pretty.'"

"GI: 'So what happens then to this big market we saw a year ago? We were probably sitting across this table saying, 'No end in sight to the housing boom.' Was that all an illusion? NS: 'Well, we said it was too good to be true for so long, and we were right. It was too good to be true.'"

"Federal Reserve Chairman Ben S. Bernanke isn't blinking in his battle against rising prices even as tumult in financial markets threatens to slow growth."

"Fed officials said higher inflation is 'the predominant risk' when they kept their benchmark interest rate at 5.25 percent yesterday. 'The signal from the Fed was unmistakable: turbulent markets, in and of themselves, will not be sufficient to force their hand,' said Peter Kretzmer, senior economist at Banc of America Securities LLC in New York."

From CNBC. "While most investors and economists applauded the Federal Reserve's decision to hold interest rates steady, there were some critics who feel the central bank blundered by not cutting rates."

"Robert Froehlich, DWS Scudder: 'The Fed is out of touch with reality and should be cutting rates right now!!!'"

"Like many economists, Brian Wesbury thinks Bernanke did the right thing. 'We've had a siren call when we should not have had one,' he added. Wesbury said that the problems in the U.S. economy are not due to overly high interest rates: 'In fact, [rates] are quite low.'"

"The economist described what he sees as the real culprit: 'Everyone expected the fed to bail them out, so they put too much leverage on. Now that that bailout's not happening, people are mad, worried, concerned -- but we've got to get that excess leverage out of the system.'"

From Reuters. "U.S. inflation has been well contained since the late 1980s and the public understands the benefits of this achievement, Federal Reserve Bank of Minneapolis President Gary Stern said on Wednesday."

"'I regret to note that today we are again witnessing some painful and belated learning, by policy-makers and consumers alike, in our consumer financial markets,' Stern said, in an oblique reference to problems in the subprime mortgage market for borrowers with risky credit."

"'This is not the time to go into details of how the Federal Reserve and the other financial regulators are responding,' he said."

"The Fed also said in its Tuesday statement that inflation remained a top concern, and Stern said there was broad support for this position. 'The public continues to understand the long-term benefits of low inflation and thus to support the Federal Reserve's pursuit of this objective,' he said."