Nobody with any experience was surprised by the housing collapse. The only people I know who were surprised (in the financial industry and out) were people who'

Nobody with any experience was surprised by the housing collapse. The only people I know who were surprised (in the financial industry and out) were people who've honestly never considered the numbers for even a minute. Housing prices have to track rent, to some degree, and vice-versa. One of them will change to match the other and wages were not going up... All the ARMs and layers of CDOs are irrelevant. They multiplied the results but didn't change the underlying issue. Leverage doesn't help you when the fulcrum shifts.