Some housing bubble news from Wall Street and Washington. Bloomberg, "UBS said Monday that the slumping U.S. housing market may lead to further write-downs on debt securities following the company's first quarterly loss in almost five years. UBS, the largest bank by assets in Europe, is at risk from 'further deterioration in the U.S. housing and mortgage markets as well as rating downgrades' on mortgage-related securities, the bank, based in Zurich, said in a statement."

"UBS reiterated that its third-quarter loss was between 600 million francs, or $516 million, and 800 million francs."

From MarketWatch. "'UBS is not assuming that the quarter will continue as positively as it has begun, or that the current difficulties will be resolved in the short term,' the group said in a statement."

From Reuters. "The UBS statement was highly unusual, coming only one day before the formal announcement of its third-quarter results."

"'They have not squashed it (the rumours of more writedowns), they have confirmed it,' said one London-based analyst, who asked not to be identified."

"UBS said the fixed income business 'remains exposed to further deterioration in the U.S. housing and mortgage markets as well as ratings downgrades for mortgage-related securities.'"

From Forbes. "Japan's biggest bank, Mitsubishi UFJ Financial Group, revealed Monday that its losses in the U.S. subprime mortgage market had ballooned to 30 billion yen ($263 million) over two months, six times more than previously announced."

The Evening Standard. "Wall Street is bracing itself for a further $5 billion of losses at Merrill Lynch as the beleaguered bank tries to steady itself in the wake of the ousting of CEO Stan O'Neal."

From Business Week. "Merrill sure prospered while the revelry lasted, raking in $800 million in CDO underwriting fees (more than any other firm) since the beginning of 2006, according to Thomson Financial/Freeman."

"Now that the boom has gone bust, Merrill is left holding billions of dollars in less attractive pieces of CDOs that haven't been sold to investors. Merrill was sitting on a lot of CDO tranches by virtue of its prime underwriting role, up to $32 billion in exposure as of June 29, the company says."

"Now, Merrill has written down the value of those hard-to-trade securities by $5.8 billion and says it has cut its overall holdings by half. Is a future write-off looming? It's a worry, especially if ratings agencies downgrade Merrill's remaining CDO securities."

From BBC Two. "The crisis in US subprime mortgages has fallen hard on the city of Cleveland, Ohio, where as many as one in six households have been affected."

"Five years ago Eleanor Hall bought a house. What she didn't realise was that her mortgage was a subprime. Now, she is unable to pay and left facing homelessness. 'I'm truly at rock bottom,' she says."

"'This was the Wild West of lending but there was no sheriff in town,' says Jim Rokakis, County Treasurer for the Cleveland area. 'There has been blood flowing on the streets of Cleveland but nobody cared. The only time anyone listened was when blood flowed on the only street that matters in this country, and that's Wall Street.'"

The LA Times. "Despite the mortgage meltdown, the blizzard of advertising for home loans continues. Lenders struggling to remain profitable now are targeting people who have good credit and plenty of home equity."

"Critics say the offers often appeal to the same inclination that led many sub-prime borrowers astray, the tendency of people to live beyond their means by using their home equity as an ATM."

"'It's all the art of distraction,' said Bruce D. Miller, CEO of Dailey & Associates Advertising. 'For some people, all they care about is the monthly payment. And that keeps them from digging in and concentrating on the hidden elements.'"

"Countrywide Financial Corp., the nation's largest mortgage lender, regularly barrages existing customers with pitches for new loans, encouraging them to cash out some of their home equity and saying they may not need to get an appraisal or prove their income."

"'There remains a very large stock of home equity that has not yet been tapped, greater than $10 trillion, which can be tapped to finance home improvements and other expenditures, such as education investment, small-business development and retirement spending,' said David Sambol, Countrywide's president."

From Yahoo Finance. "If I had an adjustable rate mortgage (ARM) and I didn't know when or how my mortgage would adjust, or how that would affect my monthly payment, I might be a little worried. After all, the media is now littered with nightmarish tales of mortgages gone bad."

"According to a study recently released by the AFL-CIO. It found that nearly half of homeowners with ARMs don't know how their loans adjust or reset, and nearly three-quarters don't know by how much their monthly mortgage payments will increase when they do readjust."

"Just 18 percent said they were worried about making their monthly mortgage payments over the next few years. It turns out that reality can be a real downer: Among homeowners who had already faced their first readjustment, 41 percent said they were worried about meeting their loan obligations."

"U.K. banks approved the fewest mortgages in 26 months in September as borrowing costs increased. Lenders granted 102,000 loans for house purchase, the fewest since July 2005 and down from 108,000 in August, the Bank of England said in London today."

"A tripling of house prices since 1997 has encouraged borrowing. Britons' debts held at a record 1.4 trillion pounds ($2.9 trillion) in September, the central bank said today."

"U.K. house prices fell for the first time in two years in October, led by central London and the financial district, a report by Hometrack showed today. Prices dropped for a second month in September, with the number of potential homebuyers dropping to the lowest since 2003, the Royal Institution of Chartered Surveyors said."

The Daily Mail. "Like so many young professionals hoping to cash in on Britain's property boom, 26-year-old Paula Collins, a recruitment consultant from London, thought her money would be safe. The buy-to-let market was booming and the deal from a Manchester developer seemed too good to pass on."

"The two-bedroom flat in the Castlefield area was valued at £175,950, but the developer was offering a 15 per cent discount, taking the price down to £149,500, and best of all, no downpayment was required."

"After 18 months, in which Manchester, like many northern cities, has seen a massive oversupply of new city centre apartments, Paula's flat is now worth just £140,000."

"Her mortgage costs her £900 a month, but she receives only £600 a month in rent. That's when she could find a tenant. Now the flat is lying empty, so Paula has to stump up £900 a month just to cover costs."

"'The offer seemed too good to refuse at the time. I decided to do this one as a long-term investment, but I hadn't anticipated that the property would be so debilitating,' says Paula. 'I paid such a high price, partly because independent valuers told us it was worth a lot more, and now I can't sell because there are so many apartments in the area.'"

"'I'm at a desperate stage. I've lost an enormous amount of money - about £14,000,' she said."

"There are 900,000 buy-to-let landlords in Britain, many spurred on in the past few years by rising house prices and the accessibility of mortgages tailored for buy-to-let investors. Many saw it as a get-rich- quick scheme in a buoyant market."

The Guardian. "The number of repossessed homes looks set to soar next year to levels not seen since the 1990s house price crash...according to the Council of Mortgage Lenders (UK)."

"The group expects the number of repossessions to rise by 50% during the year, rising from 30,000 this year to 45,000 in 2008. It said remortgaging options available to some borrowers, such as those borrowing high income multiples, people with high loan-to-value ratios and those with adverse credit histories, would also reduce."

From CNN Money. "Since the subprime crisis erupted earlier this year, vulture investors looking for bargains have been circling battered securities backed by mortgages. But the feeding has not yet begun in earnest, and that's not a good sign for the housing and credit markets."

"A recently created 'superfund' designed to buy bonds and other debt backed by home loans could deter distressed investors from entering the market. Some critics, including former Federal Reserve chairman Alan Greenspan, have warned that the fund could do more harm than good by propping up prices."

"'If you intervene in the system, the vultures stay away,' Greenspan said in a recent interview. 'The vultures sometimes are very useful.'"

"The uncertainty leaves distressed debt investors with the tricky task of 'catching a falling knife,' said Daniel Alpert, a partner at New York-based boutique investment bank which specializes in mortgage and related securities."

"'You could argue this is a good time to go in,' Alpert said. 'But my view is that a good portion of the market thinks the knife hasn't even started to plummet yet.'"

National Mortgage News. "A few weeks ago, former FHLB Chicago president Alex Pollock handed me a 'reading list' of that might shed some light on the current subprime mess/bubble/panic. None of these books, of course, are about the current crisis because, well, no one has written one yet (at least not for the layman)."

"At the top of Mr. Pollock's list? 'Lombard Street' by Walter Baeghot, a book penned back in 1873. That's right, 1873."

"Anyway, 10 days ago Federal Reserve chairman Ben Bernanke spoke before the Economic Club of New York. And what book did he reference? Answer: 'Lombard Street.' Chairman Bernanke quoted from the book, saying, Baeghot believed a panic is a 'species of neuralgia.' Confused? Type those words into Google and see what turns up…"