"Lightning Strike Destroys 10,000 Square Foot Mansion," says a headline from Winter Park, Florida.

"Was there ever a more distinct omen from the gods of the end of the housing bubble than this?" asks our correspondent, Bryon King.

And here comes our colleague Steve Sjuggerud, writing from Florida after raking through the ashes, studying entrails and consulting the stars:

"According to my research, the boom in housing is finally running out of gas. Let me explain...

"This is a change for me. I'd been bullish on housing for quite a while. For example, in the November 2002 issue of True Wealth, I recommended buying homebuilding stocks. Here's what I said:

"I expect a real estate bubble to take hold, for a few reasons. First, 'bubble money' requires easy credit, and plenty of it. It is there in the mortgage market, and more is coming. Second, because of the huge differential in real estate rental yields (7%) versus the other options (paying 2%), huge piles of money will flow into real estate. It's actually already happening, as huge pension funds are earmarking big dollars to put into real estate.

"So we've got individuals trading up. And we've got big investors (and HUGE investors) making a rational investment decision. We've got buyers coming from every direction, and not much out there to derail them. Put simply, there are no investment alternatives right now, other than your mattress.

"The only thing holding prices back is disbelief. Disbelief is actually what happens in the middle stages of all bull markets - disbelief that prices can go higher. Indeed, if it weren't for disbelief, prices would already be higher.

"We got it right in 2002. In the May 2003 issue, I reiterated my bullish stance, and recommended another homebuilding stock. I said:

"A downturn is not around the corner. Demand is unsatiated...Quoting the head honcho of this month's recommendation in a conference call he had with analysts this month: it is 'difficult to supply enough homes for the demand we're seeing.'

"But that was then, this is now.

"Most of the indicators that looked so attractive in 2002-03, when I was calling for higher home prices, have now reversed in mid-2006. So I think the rise in single-family home prices is over. Plan accordingly."

Steve was looking at the building stocks - clearly in a bear market. He also mentioned "affordability." Houses aren't as cheap as they used to be; fewer people can buy them.

He might also have noticed that sellers are getting "skunked" at their open houses. That's a new term for what happens when you open up the doors and find no one there. "A year ago," explained a real estate agent from Rhode Island to a Bloomberg reporter, "we would hold an open house and get 30-40 people passing through. Now, we may not get anyone."

It is "the first U.S. housing decline since 1999," says Bloomberg. Sales in the Northeast lead the decline, down 4.2%. In the Midwest they're down 3.8%. The West is down 0.7%. The South down 0.4%.

Where does this housing decline lead?

*** "Dirty water is a worldwide tragedy. Clean water is a worldwide investment opportunity," says The Rude Awakening's Eric Fry.

"Half of all hospital beds in the world are occupied by someone suffering from a water-related illness. In the developing nations, 80% of all diseases stem from consumption of and exposure to, unsafe water.

"There is no shortage of water on this big orb of ours, but there is an acute shortage of clean water...and the human toll is alarming.

"Contaminated water is deadlier than any other evil on Earth; deadlier than AIDS; deadlier than cancer; deadlier than contagious diseases; deadlier even than world wars. During the Second World War, one soldier died every five seconds. Today, one human being dies every 3.5 seconds from drinking contaminated water."

Interestingly, the country bearing the brunt of the clean water shortage is China.

Chris Mayer reports:

"China has about as much water as Canada, but a population 40 times as large. On a per capita basis, China's water reserves are only about one-quarter of the global average. Worse, the distribution of people and water creates its own logistical obstacles. Nearly half of China's population resides in the northeastern provinces, where only 14% of the water resources are located.

"These facts provide endless challenges for the Chinese. Water shortages and widespread pollution are serious threats to China's booming economy. It costs billions each year in lost output. The World Bank says environmental damage and health problems cost the Chinese economy more than $54 billion a year - or almost 20% of its GDP. That's why China is drastically stepping up its commitment to water management, particularly wastewater treatment and recycling. In 2005, the Chinese government pledged a US$30 billion 5-year package to overhaul its wastewater sector. Municipalities there are now required to treat between 40% and 60% of their wastewater.

"In an attempt to avert crisis, China plans to build hundreds of new water-treatment plants. But for now, bottled water is the preferred choice - even among the Chinese, at least among those who can afford it. When I was in China, bottled water was nearly everywhere. As the Monitor points out, consumption of bottled water nearly quadrupled between 1997 and 2002."

Bill Bonner is the President of Agora Publishing.  For more on Bill Bonner, visit The Daily Reckoning.