Reuters is reporting that government-backed mortgage lender Freddie Mac expects to lose $10-12 billion before the subprime meltdown is over. Previously, everyone was freaking out about theirThe Fed cut interest rates again today as they continue in their attempt to swoop in and save the economy from the credit crunch. Much like Superman, but boring and not as effective.

From the Federal Open Market Committee Statement:
Incoming information suggests that economic growth is slowing, reflecting the intensification of the housing correction and some softening in business and consumer spending. Moreover, strains in financial markets have increased in recent weeks. Today's action, combined with the policy actions taken earlier, should help promote moderate growth over time. They also left themselves some room to cut rates further:
Recent developments, including the deterioration in financial market conditions, have increased the uncertainty surrounding the outlook for economic growth and inflation. The Committee will continue to assess the effects of financial and other developments on economic prospects and will act as needed to foster price stability and sustainable economic growth.

Reuters is reporting that retail sales are down 4.4 percent compared with same period a year ago.

"With three full weekends left before Christmas many consumers might be waiting until the last minute to wrap up their holiday spending," said Bill Martin, co-founder of ShopperTrak, in a statement. We love how shopping after December 5th is now "waiting until the last minute." Get a grip.

The Wall Street Journal analyzed more than $2.5 trillion in subprime loans made since 2000 and found that as the number of subprime loans grew, the loans were being issued to borrowers with better and better credit scores—borrowers who could have qualified for traditional loans with more reasonable terms.

In fact, the WSJ says that at the peak of the subprime boom in 2005 over half of the subprime loans went to people with good credit.

By 2006, 61% of subprime loans were going to people with good or even excellent credit scores.

Why?
The surprisingly high number of subprime loans among more credit-worthy borrowers shows how far such mortgages have spread into the economy -- including middle-class and wealthy communities where they once were scarce. They also affirm that thousands of borrowers took out loans -- perhaps foolishly -- with little or no documentation, or no down payment, or without the income to qualify for a conventional loan of the size they wanted.

The analysis also raises pointed questions about the practices of major mortgage lenders. Many borrowers whose credit scores might have qualified them for more conventional loans say they were pushed into risky subprime loans. They say lenders or brokers aggressively marketed the loans, offering easier and faster approvals -- and playing down or hiding the onerous price paid over the long haul in higher interest rates or stricter repayment terms. As we've An especially gloomy report by the U.S. Conference of Mayors says that property values across the U.S. could decline by $1.2 trillion next year, slashing tax revenue by $6.6 billion.

Although California will be the hardest hit by the property value decrease, the New York City region will "see the greatest slowdown in the output of goods and services because of the mortgage crisis, according to the report."

From Bloomberg:
"The real estate crisis of 2007 and 2008 will go down in the record books,'' according to the report, released as the Conference of Mayors gathers in Detroit today for a special meeting to discuss the housing slump. ``The wave of foreclosures that has rippled across the U.S. has already battered