Default Rates to Stay Below 2% in 2013 and 2014, JPMorgan Says Businessweek High-yield bond and loan default rates will remain below 2 percent through 2014, according to JPMorgan Chase & Co. (JPM). The combination of a low interest-rate environment spurring corporate borrowing and conservative business behavior limiting risky ...

The fate of financial reform may be decided in the coming year as congressional leaders on both sides of the aisle attempt to modify the Dodd-Frank Act . In the two years since Congress passed the far-reaching regulatory overhaul, lawmakers have railed against the law for either not going far enough to reform Wall Street or being too burdensome to the industry. Republicans have sought to dismantle Dodd-Frank through a series of failed bills, placing Democrats on the defensive despite their own misgivings about the law. Read full article >>

The U.S. must do more than the recently passed "fiscal cliff" measures if the country is to rescue its debt rating from its current negative outlook, Moody's said.

OCC Says Almost 500000 Seek Reviews of Foreclosures Bloomberg After a deadline-inspired surge, nearly 500,000 borrowers are seeking formal reviews of their 2009 and 2010 foreclosures for mistakes by lenders, the U.S. Office of the Comptroller of the Currency reported. "A significant amount of effort was made to increase ... and more »

As of mid-December, the average thirty-year fixed-rate mortgage was near its historic low of about 3.3 percent, or half its level in August 2007 when financial turmoil began. However, yield declines in the mortgage-backed-securities (MBS) market, where bundles of mortgage loans are sold to investors, have been even more dramatic. In fact, all else equal, had these declines passed through to loan rates one-for-one, the average mortgage rate would now be around 2.6 percent...

The housing market is on firmer ground today, as two major tax provisions survived the fiscal cliff.

Editorial Note: This post was originally published on the Office of Management and Budget blog . [Yesterday], the Congressional Budget Office (CBO) released its score of H.R. 8, the "American Taxpayer Relief Act of 2012." By convention, the score measured the effects of this legislation relative to "current law," which assumes the expiration of all of the 2001/2003 tax cuts, cuts to Medicare physicians of almost 27 percent, and allowing the across the board cuts from sequestration to take effect. But that does not provide a realistic perspective on the impact of H.R. 8. The relevant point of comparison isn't current law, it is "current policy" - those policies that were in place on December 31 st , the day before all of these changes were scheduled to take effect. Different organizations, ranging from the Bowles-Simpson Fiscal Commission to the House Budget Committee, have considered this current policy baseline to be the appropriate reference point, since it measures changes relative to the status quo, rather than the mix of expiring provisions and policy changes that would likely never be implemented. CBO also recognizes the value in this "current policy" view and routinely publishes their interpretation, known as the Alternative Fiscal Scenario (AFS), which is regularly cited by lawmakers from both parties, including House Budget Committee Chairman Paul Ryan. The CBO current policy baseline assumes that the Bush tax cuts, the AMT patch, and expiring business tax provisions will be extended; that the Sustainable Growth Rate (SGR) cuts in payments to Medicare physicians will not take effect; and that the sequestration will be turned off. Compared to "current policy" and based on estimates from the CBO and the Joint Committee on Taxation - Congress's official score-keeping bodies - we can see that H.R. 8 would reduce the deficit by $737 billion. Within that, it would reduce spending by $107 billion. The deficit...

WASHINGTON (Reuters) - Construction spending fell in November for the first time in eight months, as an extended bout of weakness in the business sector outweighed modest growth in outlays on residential projects.