Merrill Lynch and Co., Inc. (NYSE: MER) CEO John Thain said today that the risk in the housing market is "much lower" than it has been recently as the credit crisis in the U.S. is "getting better." Leave it to the leader of a company which has written off over $30 billion in mortgage lending investment to make this claim. But the thing is, could he be right?

Although Thain said "economic pressure" will remain high over the next year, he expressed confidence that the end of the housing bubble, which is still popping in many parts of the country, is now in sight. Thain also indicated that food prices and shortages as well as higher unemployment will continue to have an impact on the U.S. economy. Of course Merrill has had three quarters of disastrous results like other large investment banks, and the company is still toiling with the idiocy of incredibly risky investments that have left it weakened financially.

Even if Thain had been hired by Citigroup, Inc. (NYSE: C) last year, he'd be in the same mess in the same industry. I'm not sure what "much lower" risk in the housing market means, although he's probably talking about his company's reduced exposure to those SIVs and other vehicles from the Flintstone era that start off fast before the wheels fall off.

I hope Thain is correct in his assessments, and Merrill Shareholders are probably wanting the same thing, just much more badly than myself.

Goldman Sachs Group Inc. (NYSE:GS) reported a 29% gain in first-quarter profit, handily beating analysts' forecasts and investors probably could care less. Wall Street is waiting on pins and needles to find out whether the largest securities firm escaped the black hole engulfing suprime lenders.

As Bloomberg News notes, Goldman Sachs is a lender to New Century Financial Corp. (NYSE:NEW), the suprime lender that can't pay its creditors. Shares of the Goldman have slumped 8.3% since February 20 amid concerns that the real estate market will fall because of higher interest rates resulting in a slowdown of the economy, Bloomberg said.

Not suprisingly, New Century shares were halted yesterday after plunging nearly 90% last week. Another subprime lender Accredited Home Lenders Co. (NASDAQ:LEND) plumetted 27% yesterday and plunged another 43% in pre-market trading.

Suprime lending is bound to come up over the next two weeks when Bear Stearns Cos. (NYSE:BSC), Lehman Brothers Holdings Inc. (NYSE:LEH) and Morgan Stanley (NYSE:MS) report earnings.