The "We didn't see it coming" thing drives me crazy. My experience in seeing it [the bubble burst] coming is reflected in three clear memories.
First, The Great Unraveling by... some economist from NJ, pretty much had me change my ARM to a fixed rate mortgage a couple years before the bust.
Second, people with good jobs in my solid middle class neighborhood were saying, "If I had to buy my [modest row] house today, I couldn't afford it." I remember exactly where I was, walking my dog.
Third, it was going to by systemic: "Systemic Risk: Fannie Mae, Freddie Mac and the Role of OFEHO," February, 2003, which lost Armamndo Falcon his job. http://www.ofheo.gov/Media/Archive/docs/reports/sysrisk.pdf
