New Briefs

Take a look at today's news:

1. Home builders are expecting sales to drop because of the subprime meltdown. See http://www.reuters.com/article/bondsNews/idUSN1428831020070314. Interesting quote from this article:

"Just because things are getting less worse, that means earnings are going up? No," said Alex Vallecillo, co-manager of of the Allegiant Mid Cap Value Fund, which sold its holdings in home builders about two years ago.

"They're perhaps going to be flat for a long time at a low level," Vallecillo said.

2. The Feds are going to start "punishing" subprime lenders. Doesn't this sound fun...more regulation: "Democratic Rep. Carolyn Maloney of New York, a committee member, is proposing legislation that would impose restrictions on banks and other mortgage lenders. They would be required, for example, to evaluate a borrower's ability to repay an adjustable-rate mortgage over the entire term of the loan, not just at the start, when much lower rates are in effect."

Full article: http://www.forbes.com/feeds/ap/2007/03/14/ap3517242.html

3. Not that conflicting news is anything new, but this article from the Association Press suggests that the housing market is stabilizing. See http://www.businessweek.com/ap/financialnews/D8NS53IG0.htm

4. But how is Wall Street really reacting? "Though default and foreclosure rates have only recently begun rising from historic lows, the report from the Mortgage Bankers Association unnerved investors because it showed that a record number of homes entered the foreclosure process in the fourth quarter. It also indicated that problems that had previously been limited to economically weak areas were cropping up in more vibrant places like California." See http://www.nytimes.com/2007/03/14/business/14lend.html?em&ex=1174017600&en=0ec0620b815e4b16&ei=5087%0A

5. And here's a summary of much of the news from the last week or so: http://money.cnn.com/2007/03/14/news/newsmakers/dodd_subprime.reut/?postversion=2007031414

That's just one day...and it's going to keep coming! What do you think? Is the worst over? Is the market set for a rebound?