As U.S. Fed chiefs met in Jackson Hole, Wyoming to discuss ways of preventing another credit crisis, CNBC's Steve Liesman asked top economic minds for their insight on the government's actions.
McCulley: Paulson Made A Mistake
"The markets have spoken very loudly that it's not sufficient for Mr. Paulson to say 'I have money authorized by Congress.' We want to know the color of his money and where does it go in the capital structure... His notion that we'd have an immaculate revival in risk appetite in the debt of the GSEs was never a credible proposition. Very few things are immaculate in this life. We want to see his money. You don't come out and say we have wallet and also say we're going out to the dairy queen."
- Paul McCulley, Pimco managing director
Feldstein: Housing Is Biggest Concern
"They have not tackled the problem of the potential downward spiral of house prices... There's nothing on the drawing boards in Congress now to stop an overshoot of house prices-- to stop house prices from not just coming down to a kind of normal, pre-bubble level but spiraling down below that with all the adverse consequences that come with it."
- Martin Feldstein, National Bureau of Economic Research president
Fisher: Treasury To Stabilize GSEs
"I think the Treasury has gotten the authority to inject capital, or lend to them [GSEs]. I think the markets are now on the edge of their chairs waiting to see how the Treasury, when the Treasury, if the Treasury is going to exercise that. I think most of us think the Treasury is going to have to do that in the coming weeks. I don't know if that's going to be in the next ten days, but I think that's likely going to be a way of instilling confidence when the Treasury steps up and tells us how they're going to do that."
- Peter Fisher, BlackRock managing director