There's some debate here at the Fool over whether we are in the midst of a housing bubble. This much we do know: The price of the average home climbed 12.1% in the past year to $182,100, and existing U.S. homes sold at a record clip in July. That's as far as the National Association of Realtors is concerned.

According to the Associated Press, a Dallas peace activist bought a house near President Bush's Crawford, Texas, ranch "so that hundreds of demonstrators trekking into Crawford have a place to gather and voice their dissent." The price: $54,000 in proceeds "from the sale of $1 buttons at peace rallies."

Crawford may be a lot of things, but housing-bubblicious isn't one of them.

In today's Motley Fool Take:

Knife the Mac

By Bill Mann (TMF Otter)

Gregory Parseghian didn't even have time to warm up the chair in the chief executive's office at Freddie Mac(NYSE: FRE). After only two months on the job, Parseghian received word from Freddie Mac's board of directors that federal regulators had demanded he step down. As of Friday night, Freddie Mac insisted that Parseghian's job was secure, but by Saturday it had changed its story once again -- telling Parseghian not to get too comfortable, because he was now officially a temp.

All of this intrigue and the changing relationships and stories make me wonder whether we're talking about Freddie Mac -- or Fleetwood Mac.

The government board that oversees Freddie Mac and Fannie Mae(NYSE: FNM), the Office of Federal Housing Enterprise Oversight (OFHEO), had remained deeply critical of Freddie Mac's decision to put Parseghian in the CEO's office. He replaced former CEO Leland Brendsel after the company announced that it would need to restate earnings due to accounting irregularities. The scandal centered on decisions made among management to smooth earnings out by using buckets to delay recognition of some income, so that the company could use these earnings later when the company needed them.

OFHEO's report on the scandal, released in July, noted that Parseghian, in his previous role as chief investment officer, was a key participant in the decisions to authorize strategies to save earnings for rainy days. As a federally chartered institution, Freddie Mac is essentially compelled to accede to the wishes of its regulators. It delayed its sale of $1 billion in notes that was to take place on Friday, stating that it wanted to give the market the opportunity to digest the changes being made in management.

My cynicism forces me to point out that Freddie Mac and Fannie Mae are, by dint of the market's assumption that they are backed by the full faith and credit of the U.S. government, essentially in monopoly positions.

That what has transpired at Freddie Mac falls well below the level of fraud at other companies should not be in question. They were not creating fictitious revenues.

But given that both Freddie Mac and Fannie Mae have substantially lower levels of disclosure required of them, it's terrifying that OFHEO (has there ever been a less memory-friendly acronym?) is only responding now to what has certainly been a serial effort to mask Freddie Mac's true performance.

Quote of Note

"Never mistake motion for action." -- Ernest Hemingway, 1899-1961

Web Ads Cycle Up

When advertising rates on the Internet began their long slide downward after the turn of the century, some may have wondered if they'd ever rebound. Was it all just a big fad? Most of us, however, believed the nascent industry would prove to be cyclical like traditional television and print advertising, and that the slide was just part of many boom-bust cycles to come.

A story in today's Wall Street Journal seems to support that assumption, reporting that Internet ad sales are up 14% for the first half of this year compared to the same period in 2002. But more important may be the fact that "big advertisers are showing renewed interest in touting their wares on the Web."

The article holds up such giants as Procter & Gamble(NYSE: PG) and General Motors(NYSE: GM) as examples. The former has found the Web to be fertile ground for reaching teens, and the latter advertises on eBay(Nasdaq: EBAY) Motors in order to nudge car buyers to its own site.

Also fueling the recovery is the popularity of the pay-per-click advertising model championed by Overture(Nasdaq: OVER), which directly helps Yahoo!(Nasdaq: YHOO) and Microsoft's(Nasdaq: MSFT) MSN, among others. One of the few companies not benefiting from the rebound is AOL Time Warner(NYSE: AOL). Consistent with what we first reported last year, its America Online division is still suffering from the non-renewal of many long-term contracts that buffered it when other ad-supported businesses were dropping like flies.

The advertising industry traditionally does well in the early expansion stage of an economic cycle. If you believe we're in such a period -- characterized by such things as low but increasing inflation and interest rates, and large amounts of unused capacity by manufacturers -- then today's news is a positive indicator of better times ahead.

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Rejection Hurts

No matter what words are used or how gingerly they're delivered, rejection stings. (A particularly effective payback, according to thrice-married New York socialite Nina Griscom, is to throw potted plants at the rebuffer's bookshelves. He'll be vacuuming for days!)

When it comes to rejection by a lender, the best payback is to prove them wrong.

According to statistics, anywhere from 30% to 70% of credit reports contain blunders. The gaffes can be anything from errors of omission (not reporting a current line of credit) to out-of-date information (saying you still live at an old address) to outright inaccuracies (claiming you have a loan for which you never applied.)

The key is to make sure there's no real reason for a lender to snub your advances by prettying-up your credit report and making sure the details it contains are accurate. Right now, TrueCredit is offering a deal for Fools -- $5 off a report that contains your credit record from the three major agencies, as well as a free peek at your overall credit score. (For a complete picture of your credit history, you must see what each major agency is saying about you.)

Here are the top reasons, according to, lenders turn down loan requests (if you can bear reading further):

  • Serious delinquency.
  • Serious delinquency and public record or collection filed.
  • Derogatory public record or collection filed.
  • Time since delinquency is too recent or unknown.
  • Level of delinquency on accounts.
  • Number of accounts with delinquency.
  • Amount owed on accounts.
  • Proportion of balances to credit limits on revolving accounts is too high.
  • Length of time accounts have been established.
  • Too many accounts with balances.
  • And finally, the most dreaded: I think of you as a brother.

Catching and fixing the most common boo-boos doesn't have to be complicated. (Here are some pointers.) No need to have a potted plant within grabbing distance.

Discussion Board of the Day: Living Below Your Means

Who really wins the lottery? Those who don't play.Rather than buying lottery tickets with money you can't afford to lose, isn't it better to work towards saving more money? How can you stretch that Powerball dollar further by holding on to it? All this and more -- in the Living Below Your Means discussion board. Only on

Quick Takes

Discount king Wal-Mart(NYSE: WMT) upped guidance for its August same-store sales results. Thanks to strong demand for all sorts of back-to-school gear, Wal-Mart now expects comps to be up 4%-6%, better than its earlier prediction of a 3%-4% gain. Should the company produce a comps gain of 6%, it would be its largest monthly gain since June 2002.

Tenet Healthcare (NYSE: THC) , one of the country's largest hospital operators, is selling five of its hospitals to Health Management Associates(NYSE: HMA) for $550 million. Tenet has struggled under the weight of government investigations and reduced earnings for much of the past year. It previously announced that it would sell or consolidate 14 of its hospitals. The company said it will announce other deals soon for the rest of the targeted hospitals.

Shares of data storage switching company McData(Nasdaq: MCDTA) tanked over 17% today, following the announcement of a disappointing outlook. The firm reported second-quarter results this morning that largely met expectations. However, McData said it expects to earn $0.05-$0.07 a share on revenue of $105 million - $110 million in its third quarter. Analysts had been anticipating earnings of $0.07 a share and revenues of $112.9 million.

And Finally...

Today on In this Motley Fool classic, lessons from Lucent.... Dell's buybacks ring hollow to shareholders... More of Selena Maranjian's adventures in homebuying.

Bob Bobala, Robert Brokamp, Paul Elliott, Mathew Emmert, Jeff Fischer, Tom Jacobs, LouAnn Lofton, Bill Mann, Selena Maranjian, Rex Moore, Rick Munarriz, Matt Richey, Reggie Santiago, Dayana Yochim