Grim scenario from housing guru

Yale University economics professor Robert Shiller, who book on the stock market bubble is titled Irrational Exuberance uttered the "D" when discussing the future of the housing market.

"I am worried that the collapse of home prices might turn out to be the most severe since the Great Depression," Shiller, a longtime analyst of real estate, said today in testimony before a Congressional committee.

Shiller said the current market problems, the most recent of which are the excesses and explosions in mortgage lending, have at their root a wildly overvalued housing market.

But he then further makes this interesting observation: that price appreciation in housing markets since 1998 has been more concentrated among low-priced homes than high-priced homes. "This fact is consistent with our observation that the growth of subprime loans has been an important driver of home prices," he said.