Just when you thought the housing market was out of the woods, a trusted financial sage delivered a scorched-earth assessment. Former Federal Reserve chairman Paul Volcker abandoned a speech to the Federal Reserve Bank of Chicago at the last minute yesterday to deliver an impromptu rant on the sorry state of the economy. Volcker, 83 -- who was appointed chairman of the Federal Reserve by both Presidents Carter and Reagan and is now an adviser to President Obama -- told the audience assembled in Chicago for the International Banking Conference: "The financial system is broken. We can use that term in late 2008, and I think it's still fair to use the term, unfortunately. We know that parts of it are absolutely broken, like the mortgage, which only happens to be the most important part of our capital markets [and has] become a subsidiary of the U.S. government." Volcker argued for a change in financial regulations and for the Federal Reserve to have more power to oversee the financial system's risk profile.