Remarks by Secretary Henry M. Paulson, Jr.
on Current Housing and Mortgage Market Developments
Georgetown Law Center

Excerpts:

• "the problem today is not limited to subprime mortgages as the number of homeowners having trouble making payments on prime mortgages is also increasing."

This fits with my ongoing theory, which is that the subprime loans are just the first...but not the largest...area of the mortgage market to go into distress.  We are far from done here, as subprime is only the beginning of mortgage debt distress. 

• "let me be clear, despite strong economic fundamentals, the housing decline is still unfolding and I view it as the most significant current risk to our economy. The longer housing prices remain stagnant or fall, the greater the penalty to our future economic growth."

Right, and this matters because the longer we build toward a tough, the worse the effect on the economy.  In my opinion, not worse in a linear sense, but more like geometrically. 

Mr. Paulson also spends quiate a lot of time talking about government efforts to help with troubled home owners, and how to help them without bailing out speculators.  It is long, but interesting.