Paulson Suggests Worst Is Past For Economy, but Housing Still Weak

WASHINGTON -- Despite continuing challenges in the housing market, the overall picture of U.S. financial markets has steadily improved over the past couple of months, Treasury Secretary Henry Paulson said Friday.

Mr. Paulson, in a rather upbeat speech that seemed to suggest the worst of the credit crisis is over, said market liquidity and investor confidence are improving in several sectors, such as corporate bonds, leverage loans and high-yield debt.

At the same time, capital and credit markets are stabilizing, leaving markets "considerably calmer now" ...