The pessimistic outlook on the subprime mortgage and housing markets which marked the March 2007 AEI conference, "Mortgage Credit and Subprime Lending: Implications of a Deflating Bubble," has come true. Now the press and public debate are filled with stories of subprime defaults, falling home prices, losses suffered both by borrowers and by investors in mortgage securities, and the credit contraction triggered by the end of the subprime bubble. Market actors are beseeching the Federal Reserve for lower short-term interest rates. The administration, Congress, and various presidential aspirants are proposing and debating government responses.

How will the market and the government respond to the ongoing housing and subprime bust? What's next for lenders, borrowers, investors, and the effects on the U.S. economy? What political actions should or should not be taken? These and related questions will be discussed by economists Desmond Lachman, John H. Makin, and Nouriel Roubini, along with R. Christopher Whalen, managing director of Institutional Risk Analytics, and Thomas Zimmerman, managing director at UBS Investment Bank. AEI resident fellow Alex J. Pollock will moderate.

This event is cosponsored by AEI and the Professional Risk Managers' International Association.