Some housing bubble news from Wall Street, Washington and the World. MarketWatch, "U.S. home prices were falling in every region of the country in September. For the first time in this housing cycle, prices in all 20 cities dropped from the previous month, with the biggest declines in the former bubble cities of Miami, Phoenix, San Diego, Las Vegas, Los Angeles and Tampa. Former boom towns in Florida and Southern California have now passed Detroit for the dubious honor of having the largest price declines in the past year."

"The last time prices fell so much, it took more than eight years for home prices to return to their peak level."

"'We judge the recent decline in home prices to be the beginning of an extended decline," wrote Drew Matus, an economist for Lehman Bros., who said prices would probably fall 15% from peak to trough nationally."

The Sydney Morning Herald. "South-west Sydney has been confirmed as Australia's worst area for mortgage pain. Six of the 10 worst postcodes for late repayments of mortgages are in that area, a study by Fitch Ratings has found. In Guildford almost 6 per cent of loans, by dollar value, are more than 30 days late in their repayments."

"South-west Sydney has been frequently pinpointed as the centre of mortgage stress following the deflation of the housing bubble late in 2003."

The Associated Press. "Germany's state-owned KfW development bank said Tuesday it has nearly doubled its risk shield for IKB Deutsche Industriebank AG, a lender battered by its exposure the U.S. subprime lending crisis."

"KfW, which is IKB's biggest shareholder, said it raised the risk shield by 2.3 billion euros, to 4.8 billion euros, ($3.4 billion to $7.1 billion) on the basis of new information regarding the valuation of risks covered by IKB's Rhineland Funding investment vehicle and because of a 'dramatic worsening' of market conditions."

The BBC News. "Algeria has suspended the first ever privatisation of a bank in the North African nation. The delay is the first sign that the US housing woes have reached Northern Africa. The finance ministry said that the sale would resume when the 'impact of the mortgage crisis' became clearer."

From Bloomberg. "Canadian banks join their global peers in recording costs tied to credit markets. Bank of Montreal, the country's fourth-biggest bank, said debt writedowns, trading losses and other costs cut profit by C$275 million."

The Edmonton Sun. "ATB Financial's CEO Dave Mowat calls it a 'major bump in the road.' Alberta Finance Minister Lyle Oberg...is a little less optimistic. He branded the $1.2-billion hole in the government-owned financial institution's books revealed this week as a 'liquidity crisis.' And as such, Alberta finance has quietly pumped in $800 million to paper over the cracks in the people's bank."

"'This is all part of the subprime,' Oberg said about the U.S. real estate crash and the financial meltdown it's creating in its wake. Even though the depositors' losses that ATB are admitting to so far are only 6.9%, Oberg fears Mowat may be low-balling the red ink after some Canadian banks made provision for write-offs of 25%."

"Alberta NDP leader Brian Mason spat, 'It smells like we've got a number of problems coming home to roost. There's maybe over a billion dollars of exposure here,' he continued."

The Globe and Mail. "The market for non-bank asset-backed commercial paper has been all but frozen since Aug. 16, when issuers of ABCP reached the Montreal Accord, which aimed to shut down the market in order to find a fix. Valuations for paper issued by each of the 22 frozen trusts vary wildly, according to people working on the restructuring."

"Apsley Trust is saddled with exposure to U.S. subprime and is in much rougher condition. In general, bond traders estimate the trusts vary in value from 60 cents on the dollar to 85 cents, but those estimates are based on skimpy public information."

The Wall Street Journal. "Norinchukin Bank reported the largest subprime-related balance among Japanese banks, announcing Tuesday that it wrote down ¥38.4 billion, or $355 million, in investments related to U.S. subprime mortgage securities in the six months ended Sept. 30."

"The bank, known for its huge assets and sophisticated investment strategies, also said the outstanding balance of its investments in subprime-related financial products totaled ¥476.7 billion after the write-down."

"Norinchukin, which is not traded, said it had unrealized losses of 53.3 billion yen on its subprime loan-related assets as of Sept. 30. The bank had an additional 14 billion yen valuation loss in October on these investments."

From Reuters. "Sompo Japan Insurance Inc said on Tuesday that its subprime-linked losses could reach 30 billion yen ($280 million). Sompo provides financial insurance guaranteeing payment of principal and interest on collateralised debt obligations (CDOs)."

"The total amount of CDOs that Sompo insures, including any subprime loan exposure, is 240 billion yen."

"Bank of China's shares slid on Tuesday after Temasek Holdings sold a $567 million stake amid market worries over the lender's exposure to the U.S. subprime mortgage crisis."

"'I'm sure the whole subprime issue went through the minds of the Temasek officials involved,' said Warren Blight, banking analyst in Hong Kong. 'The whole market is expecting (Bank of China's) provisioning to get worse -- as for all the banks with subprime exposure.'"

"'They know that (BOC) is involved in subprime mortgage. The question is why are they trimming their holdings now? Maybe the losses are increasing. Temasek knows more information than the average investor. Or maybe they think they've had enough profits,' said Louis Tse, sales director at VC Brokerage."

"A housing-market meltdown may be wracking the U.S. economy and shaking the financial markets, but in Asia, the question is how to cool things down. Many Chinese families are already deep into speculating on property, a main driver of the surging prices that have Chinese authorities worried that a bubble might be forming."

"Li Ruoning, 22, in Shanghai...borrowed about $40,000 from her parents in central China for the down payment on a 645-square-feet apartment just five minutes from her job. What's more, Li, who is single, says she would buy another apartment as an investment if she had the money."

"'I'm pretty sure that housing prices will not drop, especially with the best locations,' she said."

"Yi Xianrong, a prominent economist at the China Academy of Social Sciences, is one of those sounding the alarm. He contends that China's housing loans are riskier than those in the U.S., because he said most loan applicants give false information about their assets and income."

"'I estimate that the large majority of mortgage holders would not meet the standards for even subprime loans,' Yi said."

"'The Reserve Bank of India has been keeping a tight lid on banks' exposure to real estate,' said Ritesh Maheswari, a credit analyst with Standard & Poor's in Singapore. 'We don't foresee large-scale defaults.'"

"'I found prices rose too fast and I didn't know why,' said Sun Chunming, a technician at an online gaming company in Shanghai who bought an apartment in August. 'But I was worried if I didn't buy it now, I might not be able to afford one later.'"

"Citigroup Inc is selling up to 4.9 percent of itself for $7.5 billion to the Gulf Arab emirate of Abu Dhabi, giving the largest U.S. bank fresh capital as it wrestles with the subprime mortgage crisis and a search for a new chief executive."

"Citi is paying a high price for the capital injection, the mandatory convertibles it is selling to Abu Dhabi pay a fixed coupon of 11 percent. That is well above the average yield on U.S. junk bonds of 9.4 percent, according to Merrill Lynch data."

The Denver Post. "Latest market rumor: Citigroup plans to cut up to 45,000 employees. My guess is that thousands of Citigroup's 320,000 employees need to go because the world's biggest bank is steeped in worthless loans."

"Charles Prince announced his resignation as Citigroup's chief executive Nov. 4. Prince reportedly leaves Citigroup with more than $60 million in vested stock holdings and a pension. He'd already bagged $53.1 million in salary and bonuses over the last four years."

"And he keeps all this dough despite the fact that Citigroup stock has lost more than 20 percent since he became CEO in October 2003, and the extent of its subprime losses, though now in the multibillions, has yet to be fully tallied."

"John Holcomb, a professor at the University of Denver, who studies ethics and executive compensation, blames boards of directors for cutting contracts with executives that can't be canceled without a lot of money changing hands."

"Christmas is just around the corner, and thousands of people will be sitting in their cubicles, doing their jobs, praying that the pink slips don't land on their desks because the honchos were paid handsomely to place big bets on shoddy subprime loans. Loans even a child might question."

"Doesn't anybody ever get angry? Yes, said Holcomb. But they don't know how to direct it. 'Rather than become energized with outrage, they have become paralyzed with outrage,' he said."

"So our nation's top corporate executives keep bagging big bonuses even as they are losing our billions."

"Countrywide Financial Corp. shares fell more than 10 percent in New York Stock Exchange trading after Sen. Charles Schumer urged the regulator of the Federal Home Loan Bank system to probe cash advances to the largest U.S. mortgage lender."

"Schumer said he was alarmed by the volume of advances the system's Atlanta bank has made to Countrywide, considering 'the rapid deterioration' in the credit quality of some of the company's mortgages. Schumer expressed his concerns in a letter sent Monday to Federal Housing Finance Board Chairman Ronald Rosenfeld."

"At the end of September, Countrywide had borrowed $51.1 billion from the Federal Home Loan Bank system -- a government-sponsored program."

"'Countrywide is treating the Federal Home Loan Bank system like its personal ATM,' Schumer, who heads the housing panel of the Senate Banking Committee, said in the letter. 'At a time when Countrywide's mortgage portfolio is deteriorating drastically, FHLB's exposure to Countrywide poses an unreasonable risk.'"

"Countrywide has been aggressive in seeking to raise cash through deposits, partly because the company can't rely solely on Home Loan Bank advances and partly because deposits can offer cheaper funding, CEO Angelo Mozilo said in a telephone interview on Nov. 19."

"'You can't just get a charter and go in and borrow from the bank, and that's it, that's your franchise,' Mozilo said. 'You have to have a reliable source of deposits.'"

"Countrywide, which has announced plans to add 70 banking branches, will 'do what we have to do to make sure the company is going to be OK' when it comes to the rates it offers on certificates of deposits and other savings products, Mozilo said."

"Fannie Mae and Freddie Mac will have to operate under the same federally mandated loan limit in 2008 as the mortgage giants did this year, the companies' regulator said Tuesday."

"'While the house price survey data used in determining the conforming loan limit show a decline over the past year, as previously announced and consistent with the proposed new conforming loan-limit guidance, the level will remain at $417,000 for the third straight year,' said James Lockhart, director of the Office of Federal Housing Enterprise Oversight."

"On Tuesday, Stephen Blumenthal, a former deputy director of Ofheo, predicted that the agency will hold both Freddie and Fannie to 30% capital surpluses above the minimum level. Lockhart, he said, is 'going to continue to stay the course.'"

"During a conference call, Blumenthal also said any hope for allowing either Fannie or Freddie to buy more loans to prop up the sagging mortgage market is 'gone.'"