Michael Milken, the former junk bond king whose tenure included nearly a two-year stint in jail, is not taking the heat for the subprime meltdown.

In fact, too much emphasis and attention is being given to the subprime debacle, Milken told The New York Times. He dismisses the meltdown and its ensuing effect on the economy.

In fact, these are good times, he says.

"We’ve had plenty of trillion-dollar losses before,” Milken said. "The question is whether the future will be like the past.”

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Milken says comparisons of the high-yield, high-risk corporate bonds that he once touted at Drexel Burnham Lambert with the mortgage-backed securities behind subprime meltdown are simply not fair.

Investors who follow that train of thought are merely "people who don’t understand markets very well,” Milken says.

Securitized subprime mortgages, he insists, were simply "mispriced.”

The real culprit of the housing debacle was a "disastrous lowering of underwriting standards and other unfortunate practices,” Milken claims.

Milken says investors should now focus on what regulators will do to remedy the problem.

The problem, however, does not lie in the subprime securitizations, he says. In fact, too much regulation will result in a even deeper and longer recession, he warns. The end result will be large financial companies who seek additional regulation so that they can get rid of their rivals, Milken says. That scenario is similar to what happened to him in the 1990s, Milken said.

Milken eventually served 22 months after pleading guilty to six felony counts of securities fraud and conspiracy and paid $600 million in fines.

As for the markets, they have already seen the worst and the economy is on the rebound, the one-time trader predicts.

"When you read the newspapers, it sounds like Charles Dickens,” he said.

"I would stress that these times are good times, not bad times.”

© NewsMax 2008. All rights reserved.

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