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West Palm Beach (HedgeCo.Net) - “The worst is likely to be behind us.” Those were the words that Treasury Secretary Henry Paulson used to describe the current state of the economy after emerging from one of the most damaging credit crunches in history.
According to the Wall Street Journal, Paulson asserted that both the Fed and the Bush administration have taken the proper steps to fix the situation, which was fueled by the subprime mortgage crisis in 2007.
Citing the Bear Stearns rescue as an example, Paulson said things “feel much better today… than they did in March.” The White House also said that they would veto democrats rescue plan that calls for $300 billion in aid to troubled homeowners, calling it a “bailout.”
Paulson suggests that the key is improving regulation of both Fannie Mae and Freddie Mac and getting rid of the Federal Housing Administration altogether.
Paulson admitted his belief that there would be further "bumps along the road," and that it will take "some months longer" for the effects of the subprime crisis to level out.
Read more about the Subprime Mortgage Crisis here.
Julie Scuderi
Senior Editor for HedgeCo.Net
Email: julie@hedgeco.net
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