Tobias Adrian: "financial stability risks have been contained so far"

Financial stability risks have been contained so far and hopefully that will remain the case.  As a result, monetary policy can focus on fighting inflation and that's a desirable outcome.

[...]

I think that systemic risk has been contained to date and I'm confident in the crisis management toolkit that we have.  But I would not be surprised if there were other episodes of turmoil both in banks and nonbank financial intermediaries.

~ Tobias Adrian, IMF's director of the monetary and capital markets department, "IMF calls risks from bank crisis 'contained,' urges central banks focus on inflation," Yahoo Finance, April 13, 2023

Joseph Ayoub on how the FTX cryptocurrency crash is contained

We think Bitcoin and ETH remain a too small part of the market to cause broader financial market contagion, with a total crypto market cap size of $890 billion vs $41 trillion for U.S. equities.  The FTX shortfall is still relatively small in comparison to other crypto events, such as Luna ($40 billion lost) or market cap losses in public tech names.

~ Joseph Ayoub, Citigroup digital asset analyst, "FTX's bust and crypto crash come with two silver linings," Yahoo!Finance, November 14, 2022

Susan Barnes on subprime stresses being contained (2007)

Due to minor home price declines in 2007, we expect losses and negative rating actions to keep increasing in the near term relative to previous years.  However, as long as interest rates and unemployment remain at historical lows and income growth continues to be positive, we believe there is sufficient protection for the majority of investment grade bonds.  As of April 12, 2007, only 0.3 percent of the outstanding subprime ratings issued in 2006 have been downgraded or placed on Creditwatch.

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Let me conclude by stating S&P does not anticipate pervasive negative rating actions on financial institutions due to rising credit stresses in the subprime mortgage sector since the majority of rated financial institutions have diversified assets and mortgage lending and servicing operations aligned with strong interest rate and credit risk management oversight. Specialty finance companies that focus solely on the subprime market, however, do not enjoy the same protection and have felt the effects of the current subprime credit stresses.

~ Susan Barnes, managing director, Standard & Poor's Ratings Services, hearing before the Committee on Banking, Housing, and Urban Affairs, United States Senate, April 17, 2007

Frederic Mishkin: exposure of banks to subprime losses minimal (2007)

Moreover, because most sub-prime mortgages are securitized, the risks associated with these loans are spread widely.  Bank and thrift institutions that hold these mortgages are well-capitalized and exposure of individual banks to possible sub-prime losses do not appear to be large.

~ Frederic Mishkin, Fed vice-chair, April 20, 2007

Zou Lan on Evergrande spillover: "controllable"

The risk exposure of individual financial institutions to Evergrande is not big and the spillover effect for the financial sector is controllable...  This short-term extreme reaction is a normal market phenomenon.

~ Zou Lan, head of financial markets at the People's Bank of China (PBOC), "China central bank official says spillover effect of Evergrande's debt woes is controllable," Reuters, October 15, 2021

Janet Yellen: "inflation expectations look quite well contained"

Measures of inflation expectations, I think, look quite well contained over the medium term.  Those expectations are actually the driver of price-setting behavior.  And so it is important that we monitor it carefully, but I believe fundamentally this is something that will settle down.

~ Janet Yellen, Treasury Secretary, interview with CNBC's Sara Eisen, July 15, 2021

Larry Kudlow on the threat of the coronavirus being "contained" (2020)

I want to make those points again: You've got a fundamentally strong economy, we've done well containing this in the U.S., this virus thing will pass, and if you're a long-term investor I think they should look seriously at... buying... the stock market for the long run where the great performance has been... That does not negate the human tragedy.

~ Larry Kudlow, "Larry Kudlow says US has contained the coronavirus and the economy is holding up nicely," CNBC, February 25, 2020

RBC strategist Jonathan Golub thinks momentum stock bust is contained

I think the selloff is probably over.  If you look at the economically sensitive stuff in the market, it's not really selling off. It's tech. It's bio-tech, [which makes up about 10 percent of the market].  The other 85 to 90 percent is in perfectly fine shape.

~ Jonathan Golub, chief U.S. market strategist at RBC Capital, as appeared on CNBC, April 14, 2014

Ben Bernanke: Subprime problems should not spill over (2007)

We do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system.

~ Ben Bernanke, Federal Reserve Chairman, May 17, 2007

Henry Paulson: Subprime troubles "largely contained" (2007)

I don't see (subprime mortgage market troubles) imposing a serious problem. I think it's going to be largely contained.

~ Henry Paulson, U.S. Treasury Secretary, Reuters, April 20, 2007

(Quote provided by Kevin Depew, "Five Things You Need to Know: Housing Slump Well Contained; Well Contained to Existing Home Sales; Well Contained to Largest Cement Producer in U.S.; Well Contained to Spain; Well Contained to Auto Sales," Minyanville, April 24, 2007)

Richard Fisher: "Damage from subprime largely contained" (2007)

The damage from the subprime market has been largely contained.

~ Richard Fisher, Dallas Fed President, Dallas News, April 5, 2007

(Quote provided by Kevin Depew, "Five Things You Need to Know: Housing Slump Well Contained; Well Contained to Existing Home Sales; Well Contained to Largest Cement Producer in U.S.; Well Contained to Spain; Well Contained to Auto Sales," Minyanville, April 24, 2007)

Ben Bernanke: Subprime problems seem "contained" (2007)

At this juncture...the impact on the broader economy and financial markets of the problems in the subprime markets seems likely to be contained.

~ Ben Bernanke, Federal Reserve Chairman, AFX News, March 28, 2007

(Quote provided by Kevin Depew, "Five Things You Need to Know: Housing Slump Well Contained; Well Contained to Existing Home Sales; Well Contained to Largest Cement Producer in U.S.; Well Contained to Spain; Well Contained to Auto Sales," Minyanville, April 24, 2007)

Janet Yellen: "Waking up less at night" over housing (2007)

I'm waking up less at night than I was [over the slowdown in housing]. So far, there's been remarkably little effect [from housing] on the rest of the economy.

~ Janet Yellen, San Francisco Fed President, MarketWatch, February 21, 2007

(Quote provided by Kevin Depew, "Five Things You Need to Know: Housing Slump Well Contained; Well Contained to Existing Home Sales; Well Contained to Largest Cement Producer in U.S.; Well Contained to Spain; Well Contained to Auto Sales," Minyanville, April 24, 2007)

Merrill Lynch CFO on exposure to subprime loans (2007)

[The company's total exposure to subprime loans] is limited, contained, and appropriately marked. I think the majority of our exposure continues to be now in the highest-credit segment of the market.

As we increase our risk-taking capabilities and increase our focus on trading, you will see and you have seen a general migration in our revenue lines from net interest to principal transactions.

~ Jeff Edwards, chief financial officer, Merrill Lynch, "Merrill Lynch's profit rises 31%," MarketWatch, July 17, 2007

Joan McCullough on the Fed and its sycophants

Just sit there a moment and think back over the years on the Street's Greenspan apologists who were cheering this buffoon on, groveling at times and taking every opportunity to argue in defense of his wanton behavior. In short, they performed the public service duty of rationalizing this old coot's BS stories. At the same time, anyone who dared to question the gospel that this bloviator was spewing, was held to ridicule as lunatic fringe.

That miscreant was succeeded by Ben Bernanke, academic beard and tweed jacket included; where's the pipe? As recently as May, he was still touting the subprime mess as "contained." Enough said. Loser.

~ Joan McCullough, East Shore Partners, Morning Comment, December 4, 2007

Karlgaard: "These are small problems"

I think this is the pause that refreshes. Look, stocks are cheap, profits are up, the 10-year Treasury is low, earnings yield/bond yield spreads are about where they were in February. It’s a great buying opportunity. I don’t think we’re going to be near the top of this market until we see a wave of IPOs and I expect that in ’08 or ’09.

All of the problems are in the billions and tens of billions. The global economy is in the tens of trillions. So these are small problems.

~ Rich Karlgaard, publisher, Forbes, as appeared on CNBC’s Kudlow & Company, August 2, 2007

Paulson: The economy is "very, very healthy"

There has been a very significant correction. I think we’re at or near a bottom there. I don’t deny there’s a problem with subprime mortgages but… it’s quite containable… [The economy is] very, very healthy.

~ Henry Paulson, U.S. Treasury Secretary and former Goldman Sachs CEO, as appeared on CNBC, July 18, 2007

Ken Fisher on credit crunch: "demonstrable nonsense"

Headlines herald a U.S. prime-time, subprime mortgage implosion leading to an upcoming credit-crunch crisis – destined to sink shares, raise interest rates and impale economies. But this is demonstrable nonsense… Fact is, subprime is a relatively small part of the overall debt market and the talk is much ado about little. And if I’m wrong about that? Then you get those widening spreads to warn you. And take cover fast. Until then, be bullish and enjoy watching the bears impale themselves. They are good at it.

~ Ken Fisher, chief executive, Fisher Investments, article written for FT.com, July 17, 2007