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Daniel Mudd, chief executive of mortgage lender Fannie Mae, told CNBC that the housing slump won't hit bottom for another year and that the current credit crunch will spread “all across the housing market.” In an interview, Mudd said Fannie Mae is seeking regulatory approval to increase its lending limits in order to put more liquidity back in the mortgage market, which has been hurt by growing subprime lending troubles and tightening credit. “We’re ready to start investing now,” Mudd said. A lot of "people and institutions in the middle of the system" could benefit from the increased liquidity, he...

LONDON (Reuters) -- Big-money institutional investors have turned more risk averse than at any time since August last year, taking positions they typically do not reverse quickly, State Street data showed Friday. The U.S. financial services firm said its clients, who keep some $13.04 trillion with it as a custodian, have moved into what it called a "safety first" regime. More markets news... European stocks in the red for '07 European banks to inject more cash America's most dangerous jobs Video More video Vice Chairman of Goldman Sachs International Bob Hormats gives his analysis of the global credit crunch. Play...

NEW YORK (Reuters) -- Residential mortgage delinquencies and defaults are becoming more common among borrowers in the category just above subprime, American International Group said Thursday. AIG (Charts, Fortune 500), the world's largest insurer and one of the biggest mortgage lenders, said total delinquencies in its $25.9 billion mortgage insurance portfolio were 2.5 percent. It said 10.8 percent of subprime mortgages were 60 days overdue, compared with 4.6 percent in the category with credit scores just above subprime, indicating that the threat to the mortgage market may be spreading. While maintaining that it is "comfortable" with its mortgage exposure, AIG...

Turmoil in the U.S. home-mortgage market is starting to pinch even buyers of high-end homes with good credit records, in the latest sign of rising anxiety among lenders and investors. This surge in rates on so-called jumbo loans is particularly notable because rates on 10-year Treasury bonds have been falling. Normally, mortgage rates move in tandem with Treasurys, but market jitters have caused investors to ditch mortgage securities. Meanwhile, American Home Mortgage Investment Corp. finally succumbed yesterday to the mortgage-sector chaos that had crippled it in recent weeks and filed for protection from creditors under Chapter 11 of U.S. bankruptcy...

NEW YORK - The dream of owning a home is fading away for many Americans with less than stellar credit. On Tuesday HomeBanc Corp. said it will not issue any more loans, and Impac Mortgage Holdings Inc. shut down a type of loan called “alt-A” for people with limited documentation or slight credit issues. That followed bankruptcies for two of the country’s biggest home lenders — American Home Mortgage Investment Corp. and New Century Financial Corp. — and tighter terms at most other lenders that are thus far surviving a shakeout in the industry. “Every day I hear about a...

Let me just preface by saying that I don't make a habit of commenting on what other colleagues at CNBC say. It's neither prudent, nor necessary. I also didn't even plan on blogging this week; I'm on vacation for crying out loud! But my BlackBerry was buzzing off the base this weekend, with housing bloggers begging me to respond to Jim Cramer's outcry on Friday about the Fed and the mortgage market. So let me just blog here respectfully. I understand Cramer's passion (you can see it again in the clip below.) I do. I'm not out there in the...

“They’re pulling themselves out of the market to regroup,” is what one of my mortgage broker buddies told me on the phone this morning when I asked how in the heck Wells Fargo Wells Fargo & CoWFC could raise rates on a 30-year jumbo fixed rate mortgage from 6 7/8% to 8% overnight. A jumbo is anything over $417,000, and given today’s home prices, that’s going to hit an awful lot of borrowers. So, since Bank of America Bank of America CorpBAC and others are still at the old rate, no borrower in their right mind would go to Wells...

Jim Cramer today angrily called on Federal Reserve Chairman Ben Bernanke to lower interest rates, saying he "has no idea how bad it is out there" in the nation's credit markets. In his "Stop Trading" segment on Street Signs today, Cramer said the nation's central bank is "asleep" and should immediately "relieve the pressure" on financial firms and the nation's home owners who are facing big increases in their mortgage payments as 'teaser' rates expire. Many thousands will "lose their homes," he warned. "This is not the time to be complacent." About an hour later, he made a return appearance...

... The portion of national income earned by the top 20 percent of households grew to 50.4 percent last year, up from 45.6 percent 20 years ago; the bottom 60 percent of U.S. households received 26.6 percent, down from 29.9 percent in 1985, according to the Census Bureau. Meanwhile, average pay for corporate chief executive officers rose to 369 times that of the average worker last year, according to finance professor Kevin Murphy of the University of Southern California; that compares with 131 times in 1993 and 36 times in 1976. ...

A letter to my 14 day old son, Jon-Luc.

Friday night, the Bush presidency was in grave trouble. TV reporters at the New Orleans convention center and Superdome were fairly weeping for food and water for the visibly suffering thousands, on the fifth day after Katrina hit. Saturday, the cavalry had arrived. All day, the truckloads of troops, helicopters and relief columns moved in. By nightfall, the convention center and Superdome had been evacuated, and reporters who had been howling only hours before were cheering. By Sunday, responsibility for the disaster was being shifted by Bush aides and media allies to the mayor of New Orleans and Louisiana Gov....

What does "stay the course" mean? At one time it meant "regime change." Then it came to mean "weapons of mass destruction," then it meant "war on terror." Now apparently it means an Iraq that is "democratic and free." ...that is nonsense. How many Arab countries are currently both free and democratic -- from Mauritania to Saudi Arabia? Not a one. Does that not suggest that it would be impossible for the United States to impose on Arab culture what we mean by freedom and democracy? In fact, how many Muslim countries can boast of Western-style civil society and democracy?...

[...] It's progressive politicians who should be paying more attention. More than a hundred years ago, Charles Dickens's cockeyed optimist, Wilkins Micawber, explained to David Copperfield that the difference between happiness and misery involves the positive or negative difference between income and expenses. [...] As the government confirmed once again last week, rising costs have outpaced stagnant wages in ten of the last 12 months. [...] The Bush administration is in an ideological straitjacket. But progressive politicians have several issues they should raise, particularly long overdue increases in the minimum wage and the earned income tax credit -- kitchen table...

For education and discussion only. Not for commercial use. It is difficult to decide whether the trade figures for 2004 or the Bush Administration's reaction to them indicate the greater danger to the American economy and nation. Last year's trade deficit hit $617.7 billion -- surpassing the record 2003 deficit by 24 percent. The deficit in goods was even higher, at $666.2 billion. The imbalance increased as a share of the economy to 5.3 percent of gross domestic product, up from 4.5 percent in 2003. This is a situation usually associated with underdeveloped countries on the brink of financial collapse....

For education and discussion only. Not for commercial use. If you think Pedro Martinez' numbers against the New York Yankees look bad (and they do), they're nothing compared with the government's latest monthly trade figures. Dismal as the Boston Red Sox ace's performance against the Bronx Bombers has been, he looks like a champion next to the trade numbers, which are one important measure of the U.S. economy's performance against the rest of the world. Not that the trade surplus and deficit figures tell us everything we need to know about America's competitiveness. In particular, they compare apples and oranges...