Fed Says Subprime Mortgage Problem "Contained"

While the subprime mortgage problem has been upgraded from “run amok” to “contained” – like some toxic goo from a ‘50s horror film involving radiation, ants, tight sweaters, and Model T’s – two top U.S. economic officials are still concerned with the current state of the mortgage market.

The government appears to be looking for someone, anyone, to blame for the fiscal mess left behind by the messy performance and collapse of subprime mortgages.  Of course, when those same subprime mortgages fueled the inflation of one enormous housing bubble, the government seemed little interested.

U.S. Treasury Secretary Henry Paulson said that now the Treasury was monitoring housing market developments closely but was encouraged by signs that the housing downturn was at or near a bottom.

However, the Treasury chief said he had "grave concern" for the many Americans who will be adversely affected by the resetting of adjustable rate subprime mortgages.