nikoschopen
2,824 posts
msg #54050
- Ignore nikoschopen |
8/14/2007 1:26:02 AM
Bernanke Was Wrong: Subprime Contagion Is Spreading (Update2)By Bob Ivry
Aug. 10 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke was wrong. So were U.S. Treasury Secretary Henry Paulson and Merrill Lynch & Co. Chief Executive Officer Stanley O'Neal. The subprime mortgage industry's problems were contained, they all said. It turns out that the turmoil was contagious.
Bernanke told Congress on March 28 that subprime defaults were "likely to be contained." The Fed chief, who declined to comment for this story, changed his assessment last month. On July 18, he told Congress that "rising delinquencies and foreclosures are creating personal, economic and social distress for many homeowners and communities -- problems that likely will get worse before they get better."
Paulson said June 20 that subprime fallout "will not affect the economy overall." This week on CNBC, he provided a less definitive assessment, saying that markets have been "unsettled largely because of disruption in the subprime space. It will take a while for the impact of that to ripple through the economy as mortgages reset."
O'Neal on June 27 called subprime defaults "reasonably well contained." Merrill spokeswoman Jessica Oppenheim said this week that the company is confident his words accurately reflected the market at the time. O'Neal declined to comment.
|