Make no mistake, the boom in finance is over, says Bill Bonner in The Daily Reckoning.

Sure, some banks may bounce back, but they won’t again reach the dizzy profits of the last five years for a long time. During this period banks made billions in profits and bonuses by lending money to people who couldn’t pay it back. Now they are looking to the taxpayer for handouts to cover these bad loans.

So how come nobody on Wall Street has offered to pay back their bonuses?

Earnings season will plug along this week as reports from several banks provide the latest insight into how well the beleaguered financial-services sector is weathering the global credit-crisis storm.

Housing starts made a sizeable 11.6% jump in June, the Commerce Department announced yesterday (Thursday). However the surprising surge was explained by a change in New York City code law, rather than a true turnaround in the troubled housing market.

Speculation that the U.S. government would have to step in to bail out struggling mortgage-giants Freddie Mac (FRE) and Fannie Mae (FNM) escalated as the markets set to close for the weekend.Shares recovered slightly after Reuters reported U.S. Federal Reserve Chairman Ben S. Bernanke granted Freddie Mac and Fannie Mae emergency access to the Fed’s discount window.

Investor worry over the solvency of U.S. mortgage-giants Freddie Mac (FRE) and Fannie Mae (FNM) have gutted the stocks over the last few days more than halving their market capitalizations.

Countrywide Deal Closes; Expanding Manufacturing; Conduct Trouble at Moody’s; Hong Kong Holiday; Construction Spending Down for 11th Straight Month; Constellation Toasts to Profit; AT&T Drops iPhone Contract; BP Employees Ridden Out of Russia

Moody’s Investors Service on Friday downgraded the debt rating of key bond insurers MBIA Inc. (MBI) and Ambac Financial Group Inc. (ABK), increasing expectations that more write-downs are in the offing for the U.S. financial-services sector, which has already written off nearly $400 billion in losses.

Moody’s Investors Service, subsidiary of Moody’s Corp. (MCO), downgraded MBIA to A2 from Aaa, and Ambac from Aaa to Aa. The downgrade caused MBIA shares to shed more than 13% of their value, with an 86-cent decline to close at $5.59 on Friday. Ambac shares fared a bit better, gaining 2 cents to close at $2.05.

Moody’s downgrades follow similar reductions from Standard & Poor’s and Fitch Ratings Inc.

Crude for July delivery jumped more than $5 per barrel in New York yesterday (Wednesday) to close at $136.38 per barrel on declines in U.S. supplies and refinery activity.

Crude Hits $133; Time Warner Spins Off Cable Unit; Boeing Jettisons 750 Workers; UBS Sells Assets to BlackRock; American Airlines’ Desperate Moves; Moody’s Big Mistake; DOJ to Sue OPEC?; BOE Holds on Inflation Fears.

Concerns about the U.S. economic slowdown are starting to blunt some of the optimism surrounding Latin American economies.