Hank Paulson Flashback of 2007: subprime woes likely contained

Reuters has this gem from Fri Apr 20, 2007:

U.S. Treasury Secretary Henry Paulson said on Friday the housing market correction appears to be at or near its bottom and that troubles in the subprime mortgage market will not likely spread throughout the economy.

"We've clearly had a big correction in the housing market. Retail housing was growing for some time at a level that was not sustainable," Paulson said in a speech to The Committee of 100, a business group in New York promoting better Chinese relations.

"I don't see (subprime mortgage market troubles) imposing a serious problem. I think it's going to be largely contained," he added.

Maybe separating housing from state would be a good idea.In a free market,we doubt their would have been many lending institutions giving people mortgages with no money down.Government officials can't nullify the rules of risk in financial markets.