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This is noteworthy given the Federal Reserve's discussions on the impact of a housing bust, such as at this meeting in mid-2005.
Those working in firms that can go bust, such as venture capital, private equity and hedge funds, scoff at "too big to fail" banks: capitalism without the possibility of default, they say, is like Catholicism without hell.
Some of these cases were about establishing pensioners as creditors for a company which has gone bust, such as Lehman Brothers, rather than seeking cash from a third party.
Big dodges tend to be discovered only after companies go bust, such as when Yamaichi Securities, a top broker, failed in 1997.Unlike America, which has rushed to pass new legislation to curb corruption and reform auditing (see article), Japan has done little to prevent a repeat of past accounting fiddles.
Zandi says he expects tourism and the leisure and hospitality issues to start recovering by 2012, but metro areas that have been battered by the bust, such as Las Vegas and Orlando, Fla., also have another lure housing prices are low, office rents are down and there's plenty of real estate on the market.
In the extremely short run, a baby bust such as Europe has undergone can enhance living standards, because it reduces the number of dependents per worker.
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Even the European economies that are less directly affected by housing busts, such as Germany, have been hard hit.
Countries which experienced the biggest asset busts, such as America, Britain and Spain, have had the most disappointing recoveries.
The lesson of big banking busts, such as Japan's in the 1990s, is that debt-laden balance-sheets must be restructured and troubled banks fixed before real recoveries can take off.
But it seems to have stalled in the second quarter: growth has more or less stopped in Germany and Italy, and countries experiencing property busts, such as Spain and Ireland, are falling off a cliff.
When massive busts such as this one occur, they're largely perceived as a win for the police.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com