Ben Bernanke said in remarks to the Federal Reserve Bank of Chicago’s 43rd Annual Conference on Bank Structure and Competition:

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.

To anyone who actually believes the carnage will remain tidily behind the subprime firewall, I offer the following two pieces of evidence to the contrary.  The first is an ad [Hat tip to L who takes the time to forward me his "better" spam!]

If You Can Read and Write at the 7th Grade
Level Then I’ll Show You How To RAISE
Your CREDIT SCORE up to 249 Points in
Under 90 Days… So You Can Be
APPROVED For The CARS, HOMES,
(Business Loans) and CREDIT CARDS
You DESERVE!

[The Washington Post had a great article last month on how "credit repair" companies can pull this off.]

The second piece of evidence comes from the Chairman’s remarks:
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