Couldn’t agree with you more. What we’re looking at here is completely unprecedented in the modern financial world. I lived through the housing downturn in SoCal in the early 90s — it took me 6 years to regain my equity, and that was when there were only 30 year, fixed loans, before we had creative financing, before illegal immigrants could getno doc loans. I’m also flabbergasted that the author thinks that a return to 2001 prices is out of the question. 2001 is when the bubble began in California (don’t know about other regions). But prior to 2001, we had seen steady 5 – 7% appreciation. It is insane to think that prices won’t return to their historical norm.

But there are other reasons to believe that what is coming is without precedent.

There is a perfect storm of macroeconomic variables that could absolutely crush the U.S. economy and the world economy — starting with housing: an unwinding yen carry trade that is already causing volatility in the global stock markets; an impending war with Iran that will drive oil prices through the roof; and a dollar that is taking a serious dumpster dive. Gauging the impact of the coming housing crash based on past downturns will be of no use this time.

It is foolish to focus on housing as if it were some distinct, independent part of the global economy. The post-70s Western global financial market structure is teetering on the brink of collapse. That wasn’t the case in the early 90s. We are in for the wildest ride the world — not just the country — has seen in the last 100 years. Fasten your seatbelts, familiarize yourself with history and use a little common sense.