Housing bust worst since Great Depression

This article states how bad the bursting of the housing bubble is, and the quote from Jack Malvey at Lehman Brothers sums it all up: “In the end, the story of 2008, 2009 and possibly 2010 will be about the extent and consequences of what promises to be the worst US housing correction since the Great Depression in the 1930s.”

What's so amazing is that the government is trying to fix what they caused while blaming the bubble on "predatory lending." The cause is the massive increase in the money supply since the early 1990's. Excessive money supply by the Federal Reserve leads to easy credit. Easy credit dupes investors into making decisions they would not ordinarily make. The low interest rate and availability is too intriguing and attractive. So easy credit leads to malinvestment. Sure, there are some nefarious types in every industry, but when you're telling that couple they don't qualify for the house and then the Fed drops a pile of money on the table next to you, predictable human behavior kicks in. The mortgage broker or bank lends the money.

The same excessive money supply growth led to the dot.com bubble bursting in 2000. Now more government intervention will lead to messing up the mortgage market even further.