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<p>The last politician who took advice from the bond market was Bill Clinton. When he pushed for a tax hike back in 1993 to cut the budget deficit, it was under the assumption that bond investors would respond by bringing down interest rates. (The theory here is that deficits are inflationary. Inflation is bad for bonds.) Yet long-term interest rates surged from 6.45 percent when Clinton signed his tax-hike bill on Aug. 10, 1993, to 8.16 percent on Nov. 7, 1994, the day before the midterm congressional election where Republicans won back the House and Senate.</p>

NEW YORK - Bad credit has supplanted terrorism as the gravest immediate risk threatening the economy, a key national research group reported Monday. Borrowers' withering ability to pay their bills and the subsequent fallout in the credit markets this summer topped the list of short-term risks on peoples' minds, according to a survey of 258 members conducted by the National Association of Business Economics. NABE, a Washington-based association, said 32 percent of its surveyed members cited loan defaults and excessive debt as their biggest near-term concern. Only 20 percent of members cited defense and terrorism as their biggest immediate worry,...

Subprime-battered mortgage lenders are shutting down, fewer homes are being built, and even some of the big U.S. retailers are planning conservatively for Christmas holiday sales. It will take a few months to show up in the economic data that Wall Street and the Federal Reserve watch, but the slowing U.S. economy is hitting the job market, and economists say it is only a matter of time before unemployment ticks up. "Growth is skimming along at around 2 percent, and that is not strong enough to keep the unemployment rate from rising," said Brian Bethune, U.S. economist with Global Insight...

Until a few months ago, it seemed that anyone who could fog up a mirror could get a mortgage. Now, with a credit crisis roiling the industry, some consumers might think they have a better chance winning the lottery than finding a home loan. The truth is that you can still get a mortgage. It just may not be as easy--or as cheap--as it was over the past few years. "If you have good credit, can document your income and have money for a downpayment, it’s largely business as usual," says Greg McBride, senior financial analyst at Bankrate.com. Borrowers seeking...

Countrywide CEO: Mortgage Crisis Persists Despite BofA Stake Topics:Subprime Lending | Mergers & Acquisitions | Banking | Mortgages Companies:Lehman Brothers Holdings Inc | Countrywide Financial Corp | Bank of America CorpBy CNBC.com | 23 Aug 2007 | 01:31 PM ET Font size: The chief executive of Countrywide Financial told CNBC that Bank of America's $2 billion investment in the struggling mortgage lender was a "priceless endorsement" for Countrywide but said the crisis in the housing and mortgage markets isn't getting any better. "It's a great endorsement of Countrywide," CEO Angelo Mozilo told Maria Bartiromo in an exclusive interview. "It's important...

NEW YORK (CNNMoney.com) -- Bond remained higher Friday despite a surprisingly strong durables goods reading as credit worries continued to trouble investors. The dollar fell against the euro and the yen. Video More video Luke Newman joins CNN to explain how a private investor can build a balanced portfolio in uncertain times. Play video The 10-year benchmark note gained 8/32, or $2.50 on a $1,000 note, to yield 4.62 percent, down from 4.64 late Thursday. Bond prices and yields move in opposite directions. Bernanke: The un-Greenspan The closely watched three-month Treasury bills, which have been the focus of the market...

NEW YORK (CNNMoney.com) -- Jennifer Falke and her family had been in their Columbus, Ohio home for nearly 12 years when they hit a rough patch in 2006. Falke was out of work and fell behind on the mortgage. Falke said a flood of mailings and flyers then arrived at her door promising help from foreclosure rescue companies claiming to act as an intermediary between her and her lender to keep her from losing her home. According to Falke, the company she contacted, Foreclosure Assistance Solutions (FAS), simply took her money and did nothing for her. And by delaying a...

WASHINGTON (MarketWatch) -- The chairman of the Senate Banking Committee is urging the Bush administration to push through changes in a federal housing program that he says could help save troubled borrowers from foreclosure on their homes. In a letter to Treasury Secretary Henry Paulson and Housing and Urban Development Secretary Alphonso Jackson, Sen. Christopher Dodd, D-Conn., said the U.S. is experiencing record foreclosures and that it's "essential" that the Federal Housing Administration act to preserve homeownership for as many Americans as possible. The administration is studying the idea of allowing the agency to refinance troubled loans, something it's not...

NEW YORK (CNNMoney.com) -- Ford CEO Alan Mulally became the latest high-profile business executive to suggest that the Federal Reserve needs to cut interest rates, according to a report published Friday. Noting that credit conditions were posing a "big headwind" to the company's turnaround plan, Mulally told the Financial Times he is concerned about the state of the larger economy. Next victim of mortgage mess: Auto sales Video More video Fortune's Sue Callaway reviews and compares the Audi S4 and the BMW M5. Play video "It is a really important job to manage inflation and economic growth [but] focusing on...

NEW YORK (CNNMoney.com) -- Countrywide Financial, the nation's biggest home lender and one of those most affected by the subprime mortgage crisis, found itself the target of stinging criticism Thursday from an organization trying to help homeowners in peril. The Neighborhood Assistance Corporation of America said Countrywide (Charts, Fortune 500) was not doing enough to help people who took out subprime adjustable-rate mortgages (ARMs) over the past few years and now may lose their homes. Subprime loans are issued to borrowers with poor credit histories who often lack the funds to make large down payments. Justin Urquhart Stewart of Seven...

As the carcasses of subprime mortgage-backed securities lie rotting on Wall Street, the buzzards are circling heretofore untouchable prey: the rating agencies. Critics say the ratings industry was too late in downgrading mortgage-backed securities, echoing cries after past crises involving Enron, WorldCom and Russian debt, among others. But the current episode comes with a different twist: Rather than merely third-party observers, some sources say Moody's (MCO - Cramer's Take - Stockpickr - Rating), Standard & Poor's and their smaller rival Fitch Ratings played active roles in structuring MBS and related securities. Therefore, they could be deemed underwriters and exposed to...

Remember when Wall Street would obsess over the next leveraged buyout candidate, and hedge fund masters of the universe could raise ungodly war chests with just a handful of phone calls? What a difference a few months make. Lately, hedge fund implosions have replaced the LBO parade as the market's signature event. Investors have seen huge setbacks at funds run by Bear Stearns (BSC - Cramer's Take - Stockpickr - Rating), UBS (UBS - Cramer's Take - Stockpickr - Rating) and Goldman Sachs (GS - Cramer's Take - Stockpickr - Rating), among others, as the credit environment has grown fraught...

NEW YORK (CNNMoney.com) -- Fallout from the mortgage mess and lower home prices may have started to creep into the credit card arena, judging from July payments and some initial moves by issuers to tighten the screws on cardholders. After falling for three consecutive months, delinquent payments on credit cards -- defined as more than 30 days late - increased slightly in July, to 4.64 percent from 4.62 percent in June, according to CardWeb.com. A year ago, the delinquency rate was 4.18 percent. The amount of credit card debt consumers are paying off, meanwhile, has fallen. The portion of outstanding...

NEW YORK (CNNMoney.com) -- In another sign of how dire the subprime mess has become, mortgage lenders shed about 18,000 jobs this month, according to one estimate. But while the crisis has been largely contained to mortgage lenders and financial services firms, some economists see subprime-related labor trouble spreading to other parts of the economy in the months ahead. The number of casualties has already been significant. The collapse of New York-based American Home Mortgage Investment Corp. earlier this month resulted in the loss of nearly 7,000 jobs. On Wednesday, Accredited Home Lenders (up $0.14 to $6.24, Charts) said it...

CHARLOTTE, N.C - At the North Carolina offices of mortgage lender HomeBanc Corp., Archie Clark is the only employee left. But in a few days, he’ll be gone, too. “It’s pretty much a ghost town over there,” Clark said. “Somebody went in and took the furniture from the lobby. I don’t know who did that. I put some of the other stuff in the back and locked it up.” When Clark finishes helping movers from the company’s Atlanta headquarters collect computers and other property, he’ll join the more than 25,000 workers nationwide who have lost jobs in the financial services...

NEW YORK (CNNMoney.com) -- Tens of thousands of frightened homeowners looking to get out from under the crumbling walls of the subprime mortgage collapse have found refuge in a variety of programs. When Senate Banking Committee Chairman Christopher Dodd mentioned the national Homeowner's HOPE Hotline in comments Tuesday, it triggered some 3,000 calls. An announcement in April that the Neighborhood Assistance Corporation of America would be offering $1 billion in rescue money to beleaguered borrowers has prompted more than 50,000 inquiries, according to the organization. And in Ohio, New York, Massachusetts, Maryland and other states, distressed mortgage holders are clamoring...

The Fed hit the market with a surprise 50-basis-point discount rate cut that caught many traders leaning the wrong way Friday. The rate cut came in response to the subprime crisis and is giving the credit markets the one thing that they need the most, liquidity. Options House Zecco.com Fidelity Investments Charles Schwab E*TRADE FINANCIAL TD AMERITRADE The Fed is hoping that by injecting liquidity into the credit markets, it can avert a meltdown of the financial system. If the Fed has to take further action in response to the subprime crisis and continue pouring in liquidity, we may see...

Fretting about bonus money is Wall Street's latest fixation, but investment bankers may soon have more pressing worries. September could bring a wave of layoffs as big banks aim to bounce back from the summer's credit market swoon. Mass firings now could help brokerage firms cut costs and show investors they're taking decisive action to compete better in a tough market. It also may have dawned on banking honchos that cutting staff will help preserve whatever's left of their dwindling bonus pools. "I think [bank execs] are thinking, if I cut right now maybe I save some of this bonus,"...

The New York investment bank will cut 1,200 positions in 23 locations as a result of the closing of BNC Mortgage. It will take an after-tax charge of $25 million and a goodwill write-down of $27 million, it said. Lehman said that poor market conditions in the mortgage space of late have "necessitated a substantial reduction in its resources and capacity in the subprime space," according to a release. The company said earlier this summer that it was combining its two non-prime residential mortgage businesses - Aurora Loan Services of Littleton, Colo., which specializes in Alt-A mortgages, and BNC Mortgage...

NEW YORK (CNNMoney.com) -- Investors who are counting on the Federal Reserve to cut interest rates sometime in the next month or so may end up badly disappointed. The credit crunch of the last month has convinced many on Wall Street that a cut in the central bank's key short-term interest rate is basically a lock. Stocks jumped Friday after the Fed announced a surprise cut in the little used discount rate that the central bank charges on loans made directly to banks - and again on Tuesday on bets the Fed will cut its other key rate, the fed...