Credit crisis

The average person may find it hard to imagine what big company CEOs do to justify their massive pay packages. Shareholders often ask a similar question: Why pay executives so much when the returns they produce are often so modest? But that's a question that doesn't apply to JPMorgan Chase CEO Jamie Dimon.

Standard & Poor's is revamping its credit rating methodology for banks and financial institutions in a way that may cause about 40% of rated banks to get a downgrade, The Wall Street Journal reported Tuesday.

Allstate is suing Bank of America and its Countrywide Financial division over Countrywide's sale of $700 million in mortgage-backed securities to the insurance giant, alleging that Countrywide knew in advance that the assets would drop in value because of a high percentage of defaults.

During the heat of the financial crisis, Ben Bernanke's Federal Reserve doled out a mountain of money to keep the damage from getting any worse. But if you think American companies were the biggest beneficiaries of this largess, you'd be wrong.

Moody's downgrades Hungary's sovereign credit rating by two notches to near junk on concern that the temporary measures the government is taking to address budget issues won't be sustainable.

With the fears of a European sovereign debt crisis growing worse, the Spanish government said Wednesday that it's taking several measures to stop the fiscal contagion from reaching its shores, including selling a 30% stake in its national lottery business, Bloomberg reported.

Many aspects of the financial crisis are still with us. But when it comes to one of the most profound economic impacts of the 2008 meltdown -- the downright seizure of credit markets -- things could hardly be more different now than during the height of the crisis.

Widespread pessimism among investors seems out of line with broader economic developments, which continue to be mixed. So stocks may be undervalued because investors are being overly conservative -- meaning this could be a good time to buy.

Bet you thought the financial world had learned a bit of prudence from the recent meltdown. But no. Citigroup has a clever new derivative for the markets, and this latest attempt at selling "end-of-the-world insurance" could be just as dangerous to the system as credit default swaps were.

Massive amounts of corporate debt issued from 2003 to 2007 is set to come due over the next four years. The inability of companies to refinance their debt will leave them paying high interest payments, dragging down corporate earnings and forcing some companies into bankruptcy.