Some housing bubble news from Wall Street and Washington. MarketWatch, "Swiss Re on Monday said it was taking a $1.1 billion loss after insuring a client's portfolio exposed to the U.S. subprime mortgage meltdown and related credit-market turmoil. Swiss Re's credit solutions division had put together protection to insure an unnamed company against a 'remote risk of loss.'"

"The loss is one of the first major subprime-related hits reported by a reinsurance company. 'The full effect of the U.S. subprime crisis is finally washing on the shores of Continental Europe,' said analyst Catherine Stagg-Macey. 'Up to this point, the U.K. financial services firms had taken the brunt of this storm.'"

From Forbes. "Swiss Re refused to give details about the client it had been underwriting, but it did say that the client's portfolio was made up of mortgage-backed securities and asset-backed collateralized debt obligations whose value had fallen to zero."

"The client's entire portfolio, underwritten by Swiss Re, saw its value fall by 31.6%...because of the ratings downgrades in October."

From Reuters. "Swiss Re faces a risk of further downgrades, said Chief Financial Officer George Quinn on Monday. 'There are no similar transactions elsewhere in our portfolio,' Quinn said. 'There is a risk of further downgrades in the portfolio,' he said."

"National Bank of Canada said on Monday it expects to record a fourth-quarter pre-tax charge of $587 million on its holdings in non-bank asset-backed commercial paper, a higher-than-anticipated hit and the largest by a Canadian big bank for exposure to these troubled debt investments."

"Canada's non-bank ABCP market, worth about C$35 billion, broke down in August when investors suddenly stopped buying the interest-paying securities on concern their underlying assets were exposed to the default-hit U.S. subprime mortgage market."

"Several other Canadian big banks, as well as a number of companies invested in the paper, have already announced write-downs of up to 15 percent in the value of their ABCP as it remains unclear what the non-trading instruments are worth."

"'National Bank's provisioning represents more than 25 percent of its exposure, one of the highest levels that we have seen to date,' Dundee Securities analyst John Aiken said."

"Impac Mortgage Holdings Inc, a struggling mortgage lender, said on Monday it expects to report a larger third-quarter loss, and its chief executive said the company's viability was a concern."

"Impac projected a greater quarterly loss than the $127.7 million it posted a year earlier, but could not estimate the size. It also said the value of liabilities on its books will exceed assets, creating a shareholder deficit."

"'We are truly disheartened by the chain of events that, despite our arduous efforts, has led to the significant and abrupt loss of our stockholders equity,' CEO Joseph Tomkinson said in a statement."

"'As we continue to manage through this unprecedented real estate and mortgage business environment, which historically has never seen this magnitude of losses or lack of liquidity in the capital markets, we will do what is necessary to maintain the viability of the company,' he added."

From Bloomberg. "Impac specialized in Alt-A mortgages, which fall between prime loans given to the most creditworthy borrowers and subprime loans."

"'As a result of continued deterioration in the real estate market during the third quarter, the company expects to significantly add to its loan-loss provisions primarily due to increased delinquencies in our long term investment portfolio and increased loss severities related to the sale and liquidation of real-estate owned properties,' Tomkinson said."

"Northern Rock Plc's 25 billion-pound ($51 billion) loan from the Bank of England won't be extended indefinitely, limiting the value of potential bids for the U.K. bank that was bailed out in September."

"Interested parties 'should not assume at this stage that the current Bank of England loan facilities will be available' beyond February, the Treasury said in a statement."

"All offers for the Newcastle, England-based lender are 'materially below the market price' on Nov. 16, Northern Rock said in a statement today."

"'Materially below' could mean half the market value,' said Colin Morton, a fund manager at Leeds-based Rensburg Sheppards, which oversees about 13 billion pounds. 'Anyone who owns this stock is taking a complete gamble.'"

"A jump in credit costs in August and September left Northern Rock, which specializes in mortgage lending, unable to write new loans, forcing it to seek aid from the Bank of England. That announcement sparked depositors to stand in line to withdraw their savings in scenes that caused Richard Lambert, the country's chief business lobbyist, to liken the country to a 'banana republic.'"

"'The value to shareholders from any of the proposals...remains highly uncertain and will be dependent, among other things, on when and if there is an improvement in market conditions...' the company said a statement."

"Separately on Monday, rating agency Moody's downgraded Northern Rock's financial strength rating to D+ from C-, citing the delay in finding a corporate solution to its situation."

"As banks disclose more multibillion dollar write-downs spurred by the collapse of the subprime mortgage market, investors increasingly want to know what the banks knew, and when they knew it."

"'When we are talking about numbers of this magnitude, there really is no excuse for people to suddenly discover that they are confronting potential risks many billions of dollars higher than what they anticipated,' said Harvey Pitt, former chairman of the U.S. Securities and Exchange Commission."

"'The problem really relates to the internal capacity at any of these banks to identify with some degree of accuracy what their true risk profile is,' he said."

"The banks could also face legal liabilities for not disclosing these issues fast enough. Under U.S. Securities and Exchange Commission rules, banks are supposed to notify shareholders of a material event within four days of learning about it."

"'(The banks) didn't know until four days ago they had a big problem?' said Mary Beth Kissane, head of investor relations at corporate public relations firm Walek & Associates. 'Either they don't know, which is a competence issue, or they do, which is a criminal issue.'"

"At least nine shareholder suits have been filed against Citigroup Inc and Merrill Lynch & Co Inc executives in the last month, after the firms announced big write downs."

"'Citigroup's credibility with investors is in shambles,' shareholder Jeffrey Harris, claimed in one such suit filed last week in U.S. District Court in Manhattan."

The Wall Street Journal. "Chinese authorities are slamming the brakes on bank lending, in their latest attempt to curb the runaway investment threatening to overheat what is soon to be the world's third-largest economy."

"In recent weeks, regulators have quietly ordered China's commercial banks to freeze lending through the end of the year, according to bankers in several cities. The bankers say that to comply, they are canceling loans and credit lines with businesses and individuals."

"The lending freeze shows how the slowing U.S. economy may be complicating Chinese policy making. Lower interest rates in the U.S. give Beijing less room to push up rates...as China already has done four times this year... without creating a ripple effect."

"By raising rates further China could risk boosting the value of its currency, the yuan, too much for the comfort of its exporters, a critical part of the Chinese economy."