Speakers Offer Contrary Views on Recovery

Will the mortgage industry's current decline reverse itself by January 2008?Mortgage Bankers Association chief economist Doug Duncan predicts that it will. PIMCO senior vice president Jennifer Bridwell thinks not. Offering a bond market perspective at the 35th Annual Western Secondary Market Conference in San Francisco, Ms. Bridwell pointed to the problem of impending 2008 adjustable-rate mortgage resets as a serious bump in the road that may lead to defaults that delay recovery. Mr. Duncan said the troubles in the mortgage market were confined enough that a generally healthy economy would blunt the effect of further subprime woes.