Obviously, I’m kidding. But you get the idea. In the end, the phenomenon behind the real estate bust is human nature – alternately fearful, greedy, imprudent or insanely optimistic.

A few years ago I made my first trip back to my New York roots in some years, and visited colleagues on Wall Street. The buzz was about the hot condo market, and especially about one where the properties had been flipped multiple times. The CONDO DEVELOPMENT HAD NOT BEEN BUILT YET.

This kind of opened my eyes to the real estate phenomenon. And then I read about repeated instances of the same thing in California, Arizona, Florida and other places. Now c’mon, movers and shakers of the NY-DC power corridor! Are you guys all illiterate? The evidence was accumulating before your eyes for years. And a special raspberry to guys like Barney Frank, who egged on Democratic protectorates such as Fannie Mae to manufacture more and more paper.
Who the hell do you think you’re kidding?

Free markets generate excesses, which the markets correct. Always have, always will. A prudent government act to prevent panic and ensure that the appropriate people take their hits, while the markets mark down assets in an orderly, panic-free manner.

This is what Bernanke and Paulson have been doing. Perfectly? Of course not. But nothing is perfect. And I say more power to them and thanks for doing a very, very difficult job.