Here is an ironic excerpt from a speech Bernanke gave on the subprime mortgage market on May 17, 2007:
"All that said, given the fundamental factors in place that should support the demand for housing, we believe the effect of the troubles in the subprime sector on the broader housing market will likely be limited, and we do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system."
Ah, famous last words.
But see my next post for a follow-on discussion of what he said next:
"The vast majority of mortgages, including even subprime mortgages, continue to perform well."