End in sight for U.S. subprime crisis?
COLLEGE PARK, Md. (UPI) -- The U.S. subprime mortgage financial crisis may be past its midway point and an end may be in sight, some economists are beginning to say -- with caveats.
COLLEGE PARK, Md. (UPI) -- The U.S. subprime mortgage financial crisis may be past its midway point and an end may be in sight, some economists are beginning to say -- with caveats.
"In a month or so, we'll be past it," as long as investors aren't surprised by another major bout of bad news, University of Maryland economist Jeff Werling told The Christian Science Monitor. "There are clear signs that it's easing.
It doesn't mean it's over," Standard & Poor's Chief Economist David Wyss said. The crisis is actually a crisis in short-term debt, which has hurt everything from the ability of consumers to buy houses or cars to the ability of manufacturers to make big sales, many economists said. And if the current problems with credit availability persist much longer, they could deepen the current housing slump, adding to downward pressure on home prices and stock values -- which could, in turn, hurt consumer spending, the economists the Monitor spoke with said.
But short-term Treasury yields have rebounded, which "may be an initial sign that their comfort is being restored," even if "there is still a lack of normal function" in the short-term credit market, LaSalle Bank Chief Economist Carl Tannenbaum said
Quote of the Day
George Washington, First US President "Discipline is the soul of an army. It makes small numbers formidable, procures success to the weak, and esteem to all."
George Washington, First US President "Discipline is the soul of an army. It makes small numbers formidable, procures success to the weak, and esteem to all."
Washington debates U.S. credit crisis
WASHINGTON (UPI) -- Politicians and consultants are debating what, if anything, Washington should do to keep the U.S. credit crisis from further damaging the U.S. economy. But given the complexity of the problem and the U.S. capital's political power division, it's not clear if the debate will produce much more than some regulatory tweaks, The Christian Science Monitor said.
WASHINGTON (UPI) -- Politicians and consultants are debating what, if anything, Washington should do to keep the U.S. credit crisis from further damaging the U.S. economy. But given the complexity of the problem and the U.S. capital's political power division, it's not clear if the debate will produce much more than some regulatory tweaks, The Christian Science Monitor said.
Nevertheless, the debate is on. "The subprime (mortgage) crisis demonstrates the serious negative economic and social consequences that result from too little regulation," House Financial Services Committee Chairman Rep. Barney Frank, D-Mass., wrote in an Aug. 20 Financial Times op-ed piece.
Frank and other Democrats argue unregulated mortgage companies, which have increased their share of the business, are responsible for many of the imprudent loans that spurred the crisis, the Democrats argue. But many Republicans oppose actions they see as interference in the operation of financial markets, the Monitor said.
And in recent days, Bush administration officials have argued the overall economy remains strong and now is not a time to panic. "We are going to work through this problem just fine," U.S. Treasury Secretary Henry Paulson said in an Aug. 22 broadcast interview.