"What I've been reading", incidentally, is the blog of that arch-Keynesian Paul Krugman, who did, in fact, see the housing market collapse coming.

He didn't just see it coming, he spent the years of 2001-2003 calling for the record low interest rates with the goal of causing the housing bubble!

To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.

God willing, our intrepid macroeconomists will soon create another bubble to save us from the last bubble (which they created to save us from the bubble before that, etc.

That's how a sane economy works.