Hints of a Recovery

Already,there are signs of economic healing,Mr.Summers pointed out.Key credit spreads are already substantially narrower than last fall.Credit costs are declining.It is our hope that the program will create virtuous circles.The housing cycle must be contained by direct intervention by GSEs to bring down mortgage rates,and through setting of standards directed at payment relief,preventing foreclosures.Lower mortgage rates function like tax cuts.Taken together,these steps address each of the vicious cycles.They will permit the normal processes of economic growth to re-engage over time,the former Treasury Secretary and president of Harvard University predicted at The Brookings Institution.

Special Access:With the Treasury Secretary

U.S. Treasury Secretary Hank Paulson says he is speaking,and he listens.One of the things they're going to hear is,keep marking to market,and if you need to,go out and raise some capital.Banks need to keep marking books to assets.We are seeking to show stability for the capital markets.If necessary,the Treasury is ready to put capital in the Government-Sponsored Enterprises Fannie Mae and Freddie Mac,which are so important to the stability of the capital markets,the former Wall Street executive said.