Just how far did you say the mortgage crisis reaches?

So Freddie Mac has announced that its second-quarter profits are little more than half what they were for the same period last year, and its credit losses are five times more. Thing is, Freddie doesn't do subprimes or jumbos. Hmm, could some tranches be overrated? I'm tellin' ya, folks, bogus debt ratings have allowed this mess to spread throughout the system.

Speaking of bogus debt ratings, look at Standard & Poors and Barclays'. Barclays' was forced to turn to the Bank of England for the second time in a little over a week for its overnight borrowing (due to a "technical glitch," yeah right), but S&P was quick to hold Barclays' credit ratings steady. Is there anyone who still believes S&P is playing it straight? Apparently not any of the banks, because the overnight interbank immediately shot to nearly 0.4 percentage points above the target rate. What does that mean? Lenders are losing faith in our ability just to measure risk, let alone manage it.