Housing slump worst since Depression?

For the first time since comprehensive records going back to 1968, housing prices declined for an entire year in 2007. How bad is it? Even the financial guru for the National Association of Realtors was glum:

Lawrence Yun, the Realtors’ chief economist, said it was likely that the country has not experienced a decline in housing prices for an entire year since the Great Depression of the 1930s.

In other words, neither a Fed rate cut nor a one-off stimulus package is going to make a lot of difference. The housing market is going to have to suffer through this; I hope part of the price of that suffering is a variety of new regulatory legislation, not only on the marketing of subprime loans, but the use of things such as CDOs and SIVs by financial institutions, AND…

Regulation to address the currently incestuous relationship between these institutions and ratings agencies such as Moody’s.