Mortgage Meltdown...

As the fears and concerns as to what will happen as as a result of the housing slowdown and the subprime mortgage issue, more attention is being paid to the Mortgage Meltdown, and as evidenced by yesterday's Dow, is causing financial concern beyond just those trying to build or sell homes.

Some key parts of the linked article from CNN Money:

The U.S. government continues to downplay the danger. When the Federal Reserve met this week, the central bank said that inflation is the greatest threat to the economy, not the mortgage crisis.

Yet, Countrywide Financial, the nation's largest mortgage lender by volume, reported Thursday that "unprecedented disruptions" in the mortgage market were forcing it to cut way back on the number of loans it was securitizing and selling in the secondary markets.

In the financial markets, credit, including corporate bonds, has become harder to get. Mark Zandi, chief economist of Moody's Economy.com, had been loath to call it a "credit crunch." Instead, he called it a "liquidity squeeze," that had spread to corporate bond and other financial markets. The difference: In a crunch, nobody can get a loan; in a squeeze, only the riskier borrowers are cut out.