That was Awesome! First lets have a look at his points in the context of 8 years later, what happened?

#1 This author misses that house fundamentals in the bay area are tied to wealth generation, not income levels. A place like Facebook goes public and several thousand people are in a position to buy a million dollar house for cash. Depending on who you ask Google pays their top performing engineers in option adjusted terms between $300 and $400K/year.

#2 Interest rates are a function of economic activity, a crappy economy and you get low interest rates. At least now the Fed has stopped "promising" to keep them low.

#3 Adjustable rate loans can force the unprepared to sell their houses, that has always been true.

#4 The 'massive job loss' has been completely eradicated, the bay area is employing more people than it did in 2000.

#5 The salary declines must not be in tech, it used to be you had to be management to make $100K now you just need to be a senior engineer.

#6 The population loss from the dot com bust exodus was pretty impressive, but its also history.[1]

#7 The stock market has recovered, the NASDAQ had been adjusted, its over 4400 today.

#8 The leverage argument I didn't get. If you own a house you can't pay for you aren't "bankrupt" you are "out of a house" (that is the thing about secured no-recourse loans) and that sucks, but its not the end of the world. Lately prices have been crazy again.

#9 Shortage of first time buyers. The weird thing is that somebody is buying those houses. A lot of them are buying for the first time, so where did they come from?

#10 Speculation - I'd love to see real numbers on this today, in 2006 I could see the problem but I think the mortgage meltdown took a lot of those people out.

#11 Moving and 'retiring' is fun, and the older I get the more folks I know have taken this route. Those folks are leaving behind houses which are being bought up.

#12 Trouble at Fannie and Freddie. Boy was that spot on. I am still wondering what will be the final resolution of that mess.

#13 Love the business week quote, it was made without an understanding of the underlying mortgage mechanism that was about to embroil the world in the greatest financial meltdown since the Depression.

So it is helpful to compare this authors fears and their outlook with what actually happened in the 8 years since they wrote this. Yes there was something amiss in the housing market (the unholy love child between derivatives and sub-prime mortgages) and that did come to roost and did blow up. But once it blew up, the system has adapted. If you believe that the economy was "too good to be true" because it was being manipulated in this way, is it now more true? Less true? We will continue to see reverberations of that event in finance going forward, we appear to have avoided for now a similar melt down in commercial real estate, and many trillions of dollars have been "lost" back to the future where they belong. Good things have happened too, and eventually your grand children will read about this in their history books like we've read about the Great Depression. The tragedy would be if we failed to learn anything useful from the experience.

[1] http://www.sfgate.com/news/article/Bay-Area-is-fastest-growi...