That would be interesting. Goldman's Jan Hatzius has been bearish for a while. Here's a chart on the proposed relationship of housing to GDP
Paper Economy - A US Real Estate Bubble Blog: 2007 Goldman Sachs Housing Conference

No wonder they are the least bullish of the major brokerages
Ticker Sense: Who's the Most Bullish

More on trench warfare between lenders and insurers:

"Subprime Bad and Ugly

Subprime mortgage default insurers such as PMI Group (NYSE:PMI) and MGIG Investment Corp (NASDAQGM:MGIC) will scratch back very soon. Insurers do not just write out checks. They will want to ensure that underwriting and documentation standards have been properly adhered to.

There is increasing anecdotal evidence that subprime mortgages were given to anyone; even in some circumstances individuals whose income was left off the application/underwriting form. Claims of this nature will most likely be declined. The lender will be declared reckless and the insurer could keep the premium. The battle will be trench warfare mortgage file by mortgage file. If the insurer cannot keep the premium watch for earnings restatements and decreased cash positions."

Financial Skeptic

There was an interesting if slightly OT article on the underlying borrowing that is producing this map of CR's from the Economist's Buttonwood, titled "Ponzificating".

Premium content | Economist.com

In it, he muses about current borrowing practices using Hyman Minsky's views that borrowers are either "Hedged" (able to pay out of current cashflow), "Speculative" (able to pay interest but must sell/roll over asset to pay principal), or "Ponzi" (unable to pay neither principal or interest and relies on rising asset prices). (This Minsky view was also mentioned in Paul McCulley's article at PIMCO's site that folks have been citing in regards to the lack of entry level homeowners in the market (financial plankton)). Buttonwood seems to think the American housing market, and perhaps financial sector as a whole (given corporate/institutional debt), might be suffering from, or vulnerable to, the unraveling of a Ponzi-type borrowing system.

He states "Might the problem be more widespread than housing? The latest stockmarket wobbles suggest investors are asking themselves the same question. Financial-sector debt has risen from virtually zero 50 years ago to 100% of American GDP today, and Europe's financial corporations have helped to accelerate the money supply."

He also cites George Magnus, from UBS, that just wrote a research note titled “Have we arrived at a Minsky moment?”

It would be interesting to plaque another rising problem onto the map, increasing property taxes. I wouldn’t know where to find comprehensive info by geography, but anecdotally it seems to be on the rise everywhere. Taxes are being pushed from the federal, to state, to local levels.
For those recent buyers without an exploding ARM, there’s an exploding bill from City Hall (so they don’t feel left out).

In the last few weeks the mainstream media and industry economists have been stated the equiavalent of admiting the existence of the pacific ocean and that the earth is round. CR, Mish and Roubini as well as anybody with some walking around sense have seen this one comming (and worse) for some time now. If businessweek is fronting it, it is old, old news and the reality that the consequences of the luidity orgy are are here in force. That there are condo developers in Miami, Vegas and in a building near you denying this is to be expected. Listening to the deniers is certainly amusing, but we will have fewer laughs as this all unwinds. Thanks CR for staying clear headed and honest from the start!

Meanwhile New York, Boston, and coastal California, and even D.C. should hold up OK, he says.

Pricing may hold up in these areas as it consistently has in San Fransisco, Portland and Seattle. What they will likely see is a minor decrease and stagnant prices for a while. The far suburbs/inland areas of coastal California have seen runups that will unwind in an unpleasant way. They are already seeing price declines of 20% in many areas. Portland's Urban Growth Boundary distorts its real estate market. Seattle is similarly constrained. Other areas in the PNW are seeing some softening. I have less insight into the East.

As another example, Aspen has insane real estate prices, but is serviced by communities with more reasonable prices where ordinary folk can live.

I'm a long term housing bull but a short term bear. We have owned several rental houses for a number of years and have enjoyed significant appreciation. HOWEVER, at todays prices verses realizable rent, these houses would no longer be viable investments. (House value up 40%, rent only up 20%). A lot of the price increases were driven by investors buying in expectation of more increases, not in sustainable rental income. Where this is true, prices should fall back to close to long term sustainability where an investor can pay 20% down on a 30 year fixed note and pay the PITI with the rental income. I understand that in many markets there will be a slight premium. But, except for the chosen few, there is no justification for a large premium in most markets.

So the bubble talk relates to the fact that, in the bubble areas, price bears no discernable relationship to value. This is much like the highest flying dot.com stocks a few years ago. The bubble advocates say that the normal rules of economuics do not apply to their favorite bubble community. We saw in the dot.bust that yes they did. Th bears on this list agree that those rules will apply to the bubble markets as well. To reiterate, those markets where supply is highly constrained can have house prices well in excess of comparable rents.

Fundamentals always prevail. D.C., New York, Boston should indeed be "O.K.". Income matters. How a median house price in Miami can be virtually equiavlent to one in Fairfax county or Montgomery County when the latter have median household income nearly three times that of Dade County is a clear signal that something is amis. Vegas, Phoenix, Orlando and all of Florida look out below..........

1. Conbined "loan to value" on ALT-A purchases in 2006 was 88% on average, with 55% of buyers taking out a second at the same time as the purchase.
2. Low or no-documentation (stated income) loans were 81% of total originations.
3. Interest only and option ARMs were 62% of purchase originations in 2006.
4. 1-year hybrid ARMs were 28% of ALT-A originations in 2006 (these loans reset in just one year!)
5. Investors and second home buyers were 22% of ALT-A purchase originations in the last year.
6. Approximately 40% of purchases in 2006 involved second mortgages taken at the same time as the purchase. This is important because these "piggybacks" are how you get around loan-to-value restrictions! While the industry has tried to say that this is primarily a subprime thing, THAT IS A LIE - 55% of ALT-As had piggypacks in 2006!
7. TWENTY FOUR PERCENT OF ALL NEW ALT-A ORIGINATIONS WERE INTEREST ONLY OR NEGATIVE AMORTIZATION IN 2006!

how the system works:

Kenneth R. Harney - Appraisers Under Pressure To Inflate Values - washingtonpost.com

"You've got a situation where sales are down so everybody in the deal needs it to go through" at the contract price -- the mortgage broker, the real estate agent, the lender and the sellers, said Alan Hummel, senior vice president of Forsythe Appraisals of St. Paul, Minn., one of the largest property valuation firms in the country with 40 offices and 190 licensed appraisers. Forsythe was a co-sponsor of the new study.

Loan brokers are now routinely "dialing for values," Hummel said. "They call up appraisers and say, we've got this sale at $335,000 at such and such an address. Can you get to that number?" If an appraiser answers yes, he or she gets the assignment. If not, the appraiser is bypassed.

Worse yet, Hummel said, when an appraiser comes back with a market value estimate that is lower than the sales contract price, the appraiser may not get paid for the work, and may be blackballed by the mortgage broker or real estate agent.

The survey found that 75 percent of appraisers reported "negative ramifications" if they refused to cooperate and come in with a higher valuation. Sixty-eight percent said they lost the client -- typically a mortgage broker or lender -- following their refusal to fudge the numbers, and 45 percent reported not receiving payment for their appraisal.

Hummel said real estate agents may retaliate against non-cooperative appraisers by telling local mortgage brokers or lenders, "Look, I'm not sending any more clients to you if you continue to use that appraiser."

Well, if you look at the delinquency map, Ohio, Indiana, and Pennsylavania are all above the national averag

Yup Keith - they are - and that is all jobs related as you pointed out.

But if values in the Bubble Zones stop appreciating then those states will also see defaults increase. The only reason we haven't seen defaults increase there before now is that up until now folks who got into trouble in those states could refi or sell due to appreciation (even walk away with a profit). Not so in Michigan - no appreciation there lately.

When troubled borrowers in Cali can no longer sell out at a profit or refi with cash out - it will look a whole lot more like Michigan.

The question is will it be as bad, the same or worse than Michigan? That is an unknown. Michigan values are far lower (easier to afford) but have has much greater job stress. California is almost completely unaffordable but folks have more & better jobs.

I have no idea what will be worse in the long run but its clear from Michigan pain that job loss is worse in the SHORT run.

Everyone who got bonuses because of pushing subprime/Alt-A loans should be asked to return their bonus to fund Sentor Dodd's mortgage relief

Oops, ignore the homepage.

Sorry Sabola, I don't have a link to the Magnus research note article for you. It was only mentioned in the main Economist article that cited it. I searched the UBS site and was only able to come up with George Magnus' Bio page (it would probably help the search if I had an account there).
UBS Research Analyst Biography

I will say that I have been hearing of Minsky more and more recently. Unfortunately unlike your husband, as many on this site can attest, I'm not formally trained in Economics and am only a curious amateur. (I'm a patent attorney, so my area's of trained expertise are more in electronics, engineering and law). Our host, CR, is the real deal in that department. So while I may wish it, I can't say that I've done anything more than read things by famous economists and creatively misinterpreted them. However, thanks for sharing the story about your husband and Minsky. I have a feeling that we are probably going to be rediscovering a lot of the lessons taught by the older generation of economists like him if things continue to progress the way they are. Minsky sounds like he was a bit of a character and, like many great economists I've heard about, seems to have been just as much a student of human nature as of economics itself.

Please let us know if those old papers of Minsky's have any insights that might be of interest here. I'd love to scan over that one you mentioned on his take on the Great Depression.

Part of my worry about AHM is that they have a retail production operation to support. Yes, retail loans are almost always better quality than wholesale loans. But again, when volume drops for any reason--say, guideline tightening--the unprofitability is absorbed first by brokers in the wholesale model. A retail lender still has fixed costs to pay even if variable (commissions) is down. The temptation to misprice loans to keep volume up is enormous, and I've seen it happen too many times over the years. In fact, I got the impression that that's what did in MLN mostly, besides buy-backs. Anyway, AHM has a reputation in some gossip-channels of having overpaid managers and not much sense when it comes to expense reduction. Per the 10-k I see that assets were increased in 2006 by 6% for a 15% increase in salaries and benefits. My gut tells me that additional money was not spent on high-quality non-management workers like QC analysts and senior underwriters. I could be wrong, of course.

I was also not too happy to see this supplemental disclosure not say a word about documentation types. Don't you think that's rather a striking silence at this point in the game, if the point of a "supplemental" disclosure is to calm everyone down about your potential exposure to toxicity? I zipped through the 10-K again this morning and didn't see it there, either. Even DSL and FED provide that information.

In fact, AHM's footnotes (I am a religious reader of footnotes) bother me most because of what isn't there, not because of what is there. In this day and age, to have no substantive discussion of reserve methodology or credit risk factors in the portfolio? I'm left with the impression of a company that thinks only mere mortals have those issues. Again, I could be wrong, but then again AHM managers do have a reputation in the biz of a firm belief in their own superior intellects, which is not universally shared. Not that they're necessarily dumb; just that they really are not always smarter than the rest of us and they haven't invented The Foolproof Formula for doing this lending gig.

So take all that with a big grain of salt. I am simply saying that I look at the financials of, say, IndyMac, and I may not always like what I see, but I feel like I'm seeing the things I should be seeing. With AHM, I feel like I'm seeing the things management wants me to see, and there's just crickets chirping on subjects I think are relevant.

I've long been amused by the claims that the fact that prices haven't risen much in flyover country means there has been no housing price bubble there. It doesn't seem to occur to many people that without the loose lending prices would have been dropping, and that even stable prices could be evidence of a bubble. Perhaps one reason why there has not been more political pressure for action against Chinese and Japanese exchange rate manipulation is that loose real estate bubble lending has softened the impact in flyover land.