Turmoil could take months to resolve, Paulson says

WASHINGTON (MarketWatch) -- Strains in global credit markets could take months to work out as the markets reassess the price of risk, Treasury Secretary Henry Paulson said Thursday in a televised interview.

"There have been real strains in the capital markets and across some of the credit markets," Paulson told the Nightly Business Report on PBS. "And I think this will take a while to play out, and almost certainly over time this will have an impact on our economy."

"It's certainly going to be into the weeks, maybe a number of months," he said.
Investors seem to "learn their lesson every seven, eight, 10 years or what have you," he said.

Paulson said the economy would pay a "penalty," but insisted that the U.S. and global economies were "very strong."

Paulson said estimates of 2 million foreclosures are exaggerated. He said the Bush administration is not seeking to bail out "speculators."