I realize that the world is chaotic, but with the amount of brain power and computer power we have available, I find it beyond comprehension that policymakers can be caught with their pants down. I guess all the years I spent as a debater has taught me to look at a situation from all the angles and it is second nature, so I just expect others to do the same. Then again, if no one (current admin) listens when someone actually speaks the truth...

It's the nature of economics. Pretty much every economist knew this bubble had to come down eventually. But when is the big question, if you take hard action before the bubble bursts you will strange the economy under regulation and overly tight money, if you wait to long the economy will shatter under you or inflation will rampage out of control.

And given the lack of good advice about when the bubble will burst plus the tendency for those at the top to prefer the rose colored glasses view, it is natural that they tend to wait a bit too long to take action.

Personally, I think the Fed may even be over reacting a bit here. In the long run the bubble has to burst. The job of the Fed is too let it down slowly, not to prop it up. The Fed pumping liquidity into the market may stave off the problem for a while but only at the expense of running up inflation. And if the bubble bursts while inflation is rampant it will just be that much worse.

Jay