two bubbles: housing and financial bubbles

--Housing peaked in 2005. In June 2006, sales of existing single-family homes were 9% below their year-earlier level, sales of new homes were down 15% and framing lumber prices were down 19%. The Dow Jones Wilshire index of home-building shares had fallen 41% from its July 2005 peak. --Issurance of CDOs in 2006 hit $187 billion in 2006, according to Dealogic. That was up 72% from 2005. --Lenders wrote $600 billion in subprime mortgages last year, down a little from 2005's $625 billion, according to Inside Mortgage Finance. But they also wrote $400 billion "Alt-A" mortgages -- a category between prime and subprime loans -- up from $380 billion in 2005. --When housing retreated, underwriting standards needed to fall just to keep the whole thing going. Federal Reserve surveys show lending standards for mortgages slipped through the third quarter of 2006.