AEI's prescient Deflating Bubble panel returned with an update on the financial world in the wake of the bubble and to outline its expectations for the the summer of 2010. At the time of the first AEI Deflating Bubble conference in March 2007, as official voices were optimistically proclaiming that "the subprime problems are contained," panelists gave a far more pessimistic and far more accurate assessment. These insightful analyses were repeated in subsequent sessions. Three years later, is the bubble finally over? Have the fundamentals of real estate finance recovered, as bond and equity markets have? How will continuing bank failures, the insolvency of Fannie Mae, Freddie Mac, and the Federal Deposit Insurance Corporation, as well as the unwinding of the Federal Reserve's vastly expanded balance sheet, affect developing financial events? How do these relate to problems regarding U.S. and foreign government debt?

These and related questions were discussed by Deflating Bubble expert panelists AEI resident fellow Desmond Lachman; AEI visiting scholar John H. Makin; New York University professor of economics Nouriel Roubini; R. Christopher Whalen, managing director of Institutional Risk Analytics; and Thomas Zimmerman, managing director at UBS Investment Bank. AEI resident fellow Alex J. Pollock moderated.