.bodytext {float: left; } .floatimg-left-hort { float:left; margin-top:10px; margin-right: 10px; width:300px; clear:left;} .floatimg-left-caption-hort { float:left; margin-bottom:10px; width:300px; margin-right:10px; clear:left;} .floatimg-left-vert { float:left; margin-top:10px; margin-right:15px; width:200px;} .floatimg-left-caption-vert { float:left; margin-right:10px; margin-bottom:10px; font-size: 10px; width:200px;} .floatimg-right-hort { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 300px;} .floatimg-right-caption-hort { float:left; margin-right:10px; margin-bottom:10px; width: 300px; font-size: 10px; } .floatimg-right-vert { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 200px;} .floatimg-right-caption-vert { float:left; margin-right:10px; margin-bottom:10px; width: 200px; font-size: 10px; } .floatimgright-sidebar { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 200px; border-top-style: double; border-top-color: black; border-bottom-style: double; border-bottom-color: black;} .floatimgright-sidebar p { line-height: 115%; text-indent: 10px; } .floatimgright-sidebar h4 { font-variant:small-caps; } .pullquote { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 150px; background: url(http://www.dmbusinessdaily.com/DAILY/editorial/extras/closequote.gif) no-repeat bottom right !important ; line-height: 150%; font-size: 125%; border-top: 1px solid; border-bottom: 1px solid;} .floatvidleft { float:left; margin-bottom:10px; width:325px; margin-right:10px; clear:left;} .floatvidright { float:right; margin-bottom:10px; width:325px; margin-right:10px; clear:left;} Any other ideas? When U.S. Treasury Secretary Henry Paulson announced a plan earlier this month to freeze interest rates on subprime adjustable-rate mortgages, critics were everywhere.

Bloomberg quoted the director of Harvard University’s Joint Center for Housing Studies, Nicolas Retsinas: “At best, it may stop some of the hemorrhaging of the housing market, but it doesn’t necessarily turn things around. The fundamental problem with housing is oversupply.”

The same article quoted testimony before the U.S. Senate Judiciary Committee by Moody’s Corp. chief economist Mark Zandi. He said the prices of existing homes may fall as much as 15 percent by 2009 from their peak last year, even if interest rates are frozen on a fifth of 2006 subprime loans resetting next year, and predicted that about 2.8 million mortgage loan defaults will occur in 2008 and 2009.

Plus, we might have other loan problems that aren’t getting enough attention. After Federal Reserve policy-makers cut interest rates, The Wall Street Journal carried an article headlined “Why borrowers may not benefit from rate cut,” explaining that not all loans are affected by such an act.

“Rates remain stubbornly high” on some types of loans, the Journal noted, “because many of these loans are tied to the London interbank offered rate, or Libor” and that rate has decreased only slightly in recent months.

“The Libor spread is screaming that there is a big, big stress point in the banking system,” a market researcher is quoted as saying.

One more alarming item: New York Times columnist and Princeton University economist Paul Krugman recently wrote: “I’ve never seen financial insiders this spooked. … This time, market players seem truly horrified – because they’ve suddenly realized that they don’t understand the complex financial system they created.”

This puts all of the other problems into an alarming perspective. We rely on experts in every field to understand what they’re working with. But confusion does seem like a logical explanation for the mess we’re in.