Some housing bubble news from Wall Street and Washington. Bloomberg, "Centex Corp., the second-largest U.S. homebuilder, reported a $975.2 million third quarter loss as the housing slump and tighter lending standards cut demand. Centex wrote down $554 million in land and property values in the quarter and has cut more than 40 percent of its workforce since 2006. The company closed on 6,657 houses, a 20 percent decline from a year earlier. The average price fell 11 percent to $268,588."

"'The housing market continues to correct and tighter mortgage underwriting standards are affecting home prices,' Tim Eller, Centex's CEO, said in the statement.'

The Orange County Register. "Orange County mammoths Standard Pacific Homes in Irvine and William Lyon Homes in Newport Beach...have seen their credit ratings downgraded and both have sold properties – often at a loss – to raise cash as they struggle to stay afloat."

"It looks like they've made the same old mistake: buying too much land at too high a price. 'The companies that survive will be those that don't have huge ownership of lots of land and that aren't highly leveraged,' said Kerry Vandell, professor of finance and real estate at the UC Irvine's Merage School of Business."

"William Lyon owned $1.62 billion in real estate inventory and had just $34.5 million in cash, according to its most recent financial report. Standard Pacific reported an inventory of $2.95 billion and only $5 million in cash."

"'This downturn is more protracted than anyone forecasted, and so their financial position is worsening,' said Joseph Snider, Moody's senior credit analyst for the housing industry. 'Since October, we've had 20 ratings actions – all negative.'"

"Standard Pacific has a $150 million note due in October and $1.2 billion due between 2009 and 2015. 'Getting out of this situation is going to be extremely hard if not impossible,' said Tim Backshall, chief strategist of Credit Derivatives Research. 'It's very likely – given the lack of cash flow, the large interest and expenses – that these guys won't survive.'"

The New York Times. "UBS, the largest Swiss bank, said Wednesday that it would write off $14 billion in losses on the troubled U.S. housing market and post a net loss for 2007. The numbers 'include around $12 billion in losses on positions related to the U.S. subprime mortgage market and approximately $2 billion on other positions related to the U.S. residential mortgage market,' the bank said."

"UBS said Dec. 10 that it was writing off $10 billion of subprime investments for the fourth quarter, so the numbers Wednesday represented $4 billion more in losses than it had previously disclosed."

"The bank had already announced a $4.4 billion loss on subprime investments in the third quarter. The figures Wednesday bring its 2007 U.S. residential mortgage-related losses to $18.4 billion."

"Merrill Lynch & Co., the world's largest brokerage, plans to exit the business of underwriting collateralized debt obligations and other structured credit products after the securities led to a record loss."

"'We are not going to be in the CDO and structured-credit types of businesses,' new CEO John Thain said today."

"Merrill posted its largest-ever loss last year after writing down the value of its CDOs and other assets related to subprime mortgages by more than $24 billion. The New York-based bank was the biggest underwriter of CDOs from 2004 through 2006."

The LA Times. "The FBI is conducting 14 criminal investigations of mortgage lenders and the firms that turned their high-risk loans into complex securities that have left investors worldwide with huge losses, a top official at the federal agency said."

"'We're looking at the whole range of those involved -- including the investment banks and other entities that bundled the loans up for sale and the institutions that held them and reported [to investors] on their value,' Neil Power, head of the FBI's economic crimes unit, said in an interview from Washington."

"The sub-prime lending investigations also extend to home builders, he said."

"The principal focus of the probes is whether companies juggled their books to conceal problems with mortgages made during the frenzy of the housing boom. In some cases, Power said, agents are looking into whether corporate executives used inside knowledge of lending problems to benefit themselves at the expense of other shareholders."

"In another development that came to light Tuesday, a fired loan officer alleged that a joint venture between No. 1 mortgage lender Countrywide Financial Corp. and Los Angeles-based builder KB Home improperly inflated home appraisals and falsified incomes to put borrowers into homes they couldn't afford."

"Officials at the Securities and Exchange Commission are conducting more than 30 investigations into the mortgage meltdown. Erik R. Sirri, head of the SEC's market regulation division, said recently that securities firms and banks sold 'too many lottery tickets' tied to home loans and failed to look closely enough at their growing risks."

"The FBI is looking at many of the same cases as the SEC, the agency said. 'There is a lot of overlapping,' Power said."

From Reuters. "The FBI said it is cooperating with the Securities and Exchange Commission, which has confirmed opening at least three dozen investigations related to the subprime mortgage market."

"Goldman Sachs, Morgan Stanley and Bear Stearns -- among Wall Street's largest banks -- each said on Tuesday that government investigators are seeking information from them about their subprime activities."

"The subprime crisis began after the housing price bubble burst months ago and left millions of U.S. homeowners with bad credit holding high-interest rate mortgages they could no longer afford. Many are now losing their homes."

"As an economic slowdown and the subprime mortgage crisis deepen across the United States, Hispanic immigrants are increasingly in danger of losing their jobs and their homes."

"Both legal and illegal immigrants joined Americans in buying homes they could barely afford when the market spiraled upward and many have been caught with mortgages higher than the value of their homes as prices have slumped in the past year."

"Unemployment among Hispanics in the United States jumped to 6.3 percent in December, up from 5.7 percent the previous month and well above the national average of 5 percent, U.S. Department of Labor statistics show."

"And almost half of the mortgage loans in the hands of Hispanics are subprime, making them especially vulnerable to the housing downturn."

"Nelson, a 29-year-old legal immigrant and construction worker from El Salvador, had a miserable run of luck in November, when he lost his job and his subprime mortgage bills jumped $650 to about $2,650."

"Like many caught up in the crisis, the father of three said he had no idea his monthly payments would soar two years into the mortgage when he closed the adjustable-rate subprime deal."

"'You have to sign a lot of things when you buy a house, so I didn't read, I just signed. I think it was the anxiety, the happiness of buying my house,' he said. 'I feel a bit betrayed.'"

"He says he now has to sell the home he bought in Maryland in 2005. If he is unable to sell in the next four months, he will have to foreclose, meaning an even bigger financial loss and a damaging black mark on his credit record."

"'I have to practically give it away,' he said."

From AFP News. "Former Federal Reserve chief Alan Greenspan cast doubt on the ability of the central bank to prevent a US recession in an interview to appear on Thursday."

"Greenspan told the German weekly Die Zeit that the Fed or political policies could 'probably not' keep the world's biggest economy from sliding into recession, as financial markets widely expected the US central bank to cut its main lending rate."

"'The influences of the global economy today are stronger than almost any monetary or budgetary response,' the German-language weekly quoted Greenspan as saying."

"'Real long-term interest rates have much more influence over the heart of economic activity than national decisions,' he was quoted as adding. 'And central banks have less and less power to influence long term rates.'"

"Some analysts have said that low interest rates under Greenspan's watch were responsible in part for the US housing bubble that burst last year, and led to the current financial crisis."

"Die Zeit quoted him as saying he found it hard to understand that 'the Federal Reserve policy had somehow allowed housing and stock prices to rise.'"

"Fallout from the crisis, which began with a meltdown of the US market for high-risk, or subprime, mortgages, continues to rock international financial markets and now threatens the US economy with a recession."

"For Greenspan however, the turmoil was 'entirely the result of market forces at a global level.'"