Anyway, it’s striking that the worst of the crisis is hitting states that largely didn’t experience a housing bubble.
Here is more, from Paul Krugman. That is another reason why I think that aid to homeowners will not hit the target and why I think markets are failing to solve an economic calculation problem. The economy needs some new things to do but another bubble will not work, much of finance is frozen or contracting, and economic and political uncertainty is encouraging a scramble for liquidity and decisions to wait. We can see the information — about what to do next, economically — disintegrating before our eyes.