I agree that this last round in the housing bubble drama has gotten people’s attention. I used to be happy when the MSM even mentioned the possibility that this is a housing bubble. The narrative has now turned into “crisis” reporting. The media loves that stuff. I have a feeling we will be hearing alot from the “it’s not that bad” crowd. I found this quote on socalbubble regarding the opposite camps argument;

“The subprime sector is too small to have such a big impact, according to Robert Froehlich, who is chairman of the investor-strategy committee at DWS Scudder, a division of Deutsche Bank AG.
“For all this to occur, the subprime-mortgage collapse has to be big enough and important enough to set the wheels in motion. And the fact is that it isn’t,” he wrote in a market commentary Monday. “It will be the most hyped disaster that never occurred since Y2K.”
Froehlich said Monday that, like Y2K, investors are worrying too much about a subprime-fueled disaster that probably won’t happen.
“The subprime-mortgage market is big, but it’s not big enough to push the U.S. economy into a recession by causing a credit crunch,” he added.
During the peak of the industry’s growth in 2004 and 2005, about 3.2 million homes were purchased with a subprime loan, Froehlich estimated. That’s about 2.8% of total U.S. households, he wrote.
If 30% of those subprime homeowners fail to make their payments, fewer than 1 million households would be “out of luck and out on the street,” Froehlich projected.”

Personally I like to call this the “It’s only a flesh wound” argument. But I’m sure you will be hearing a chorus sing (spin) this tune. IMO they will not be able to spin their way out of this. The last series of events are hitting like a freight train. As I mentioned this has Joe Sxipack’s attention. This could be a critical turning point in market psychology. I agree with Bill Fleckenstein and anticipate a market freeze over the next three to six months. it’s definitely getting interesting.