The layoffs in the housing sector are already beginning:

Layoffs hit hard at Andersen - Minneapolis Star Tribune

The housing slump has hit home for the workers at Andersen Corp., as the big windowmaker confirmed Wednesday that it will lay off 440 of its newest hires at its Bayport, Minn., and Menomonie, Wis., operations Jan. 2. ...

The Bayport window and door plant will let go 400 of its 2,600 workers. The Menomonie plant will lay off 40 of its 340 workers.

Those facilities, which are two of Andersen's 18 production plants, were targeted for layoffs because their products are closely tied to housing starts, company spokeswoman Maureen McDonough said Wednesday. The layoffs account for about 2.9 percent of the company's global workforce of about 15,000.

The downturn in the housing industry "has created less volume opportunity for Andersen," McDonough said. "Housing starts are down 12 percent year-to-date and industry experts are forecasting a further decline of about 10 to 12 percent in 2007." She said the decline is not considered temporary "but rather a long-term correction. Because we don't expect a quick rebound, it's clear that we have more capacity than we need to meet demand. So unfortunately ... we need to reduce the size of our workforce."

Thread from Capitalstool:

After all, TOL is basically a stock printing machine. The homebuilding is just a sidelight, something to do in between cashing in option grants.

TOL reported 4Q net income of $173M. That's $692M annualized. The Toll Brothers cashed in on over $450M in stock sales in the past 18 months, and a couple hundred million more in 2004. Most of this stock was granted at $0-$5 a share.

No doubt that even if TOL loses money next year, the Brothers Toll will find a way to scratch out a hundred mil or two for themselves. They're very good at what they do.

Some action in the bond market on the shuttering of Ownit Mortgage Co.

They way they let the employees know about the closing of the company sounds a lot like the last days of the dot.com era :

Ownit a victim of sub-prime shakeout - Los Angeles Times

The Ownit news should raise some serious red flags. For years now we've been told that the banks are safe from bad loans because they package the loans and get them off their books. So, a Japanese bank fiasco type of meltdown is less likely (or so we are lead to believe). Well, what happens when they can't package and sell off these loans? I would say that means they stop lending which will impact housing yet again. The next step is a spike in defaults and then reality will set in because the banks may have sold off this toxic crap but they then went out and bought the toxic crap from other banks since credit spreads have contracted so much in higher rated paper. Ah, the quest for yield! So the banks may have transferred the risk of their own paper but they're all in it together. How will this all unravel and when will the securitized bond market react since it's never really been stress tested? Hold onto your hats!

Honestly Bob Toll sounded exactly like John Chambers used to sound in 2000 and 2001 with CSCO. He is not trying to help anyone out but himself. PERIOD.

I like your remark here PW:

Housing prices and volume toppled because consumers are tapped out not because interest rates rose.

And know that at this very moment financial engineers are working their profit motivated little minds to invent another spigot so they can tap more, and deeper. How about securitizing your social security? You thought you were tapped out, but you missed your very own past, present and future SS contributions. That's worth something. That's tappable. And see if some haywire scheme doesn't show up to save us from The Alternative.

PW: Interesting insight. The optimism you have encountered boggles the mind. I believe housing is toast for the same reasons you do. Basically, everyone who can or wants to buy already has. And many of those who did buy should not have and will wind up as non-owners once again. Even if interest rates plunged once again, I still cannot afford current prices! And we make above the area median! In order to make homes affordable for someone like me, it will take at least a 35-40% haircut. Toll has completed hundreds of units near me, and many remain dark at night. They are still building several hundred more! Can someone give me a rational argument as to how values cannot plunge? I think the economists and other "experts" can run all the fancy formulas and models they want, it cannot replace "boots on the ground", to borrow a military phrase. Just step outside and look around. You cannot help but see market saturation.

I wonder how important/large these Big Corporations are:

homebuilders such as KB Home, Toll Brothers (Charts), Pulte Homes (Charts), Lennar (Charts), and D.R. Horton (Charts) have all seen their profits fall sharply, with many lowering their forecasts.

Not so large as the half dozen auto manufacturers are who make virtually all the vehicles in this country. (In fact can you even get your special wind-turbonized Solarized Wonder in the gargage even licenced?)[How about insured?]
So, it looks like auto sales is such a complete document of that segment (auto manufacturing) compared to housing/house sales which has to tabulate so many, in so many less well-defined circumstances.
So, when we get the car news next month/quarter, this news covers all the nooks and crannies --providing a clean picture of that other American Dream (cruisin for burgers) that is quietly slipping away as we try to make mortgage payments on the new-fangled American Dream (McMansions : you deserve one).
Of course not all of us are dreamin.