Fed Governor Kevin Warsh, in a speech on the Promise and Peril of the New Financial Architecture (via Calculated Risk), argues convincingly I think that the current crisis involves more than housing – a whole lot more:

Many observers maintain that the boom and bust in the housing market are the root cause of the current turmoil. No doubt housing-related losses are negatively affecting household wealth and spending. Moreover, the weakness in housing markets and uncertainty about its path have caused financial institution balance sheets to deteriorate. This situation has further accelerated the deleveraging process and tightened credit conditions for businesses and households…

While housing may well have been the trigger for the onset of the broader financial turmoil, I have long believed it is not the fundamental cause. Indeed, recent financial market developments strongly indicate that housing, as an asset class, does not stand alone. Indeed, the problems associated with housing finance reveal broader failings, including inadequate market discipline, excessive reliance on credit ratings, and poor credit and liquidity risk-management practices by many financial firms.

…I would advance the following: We are witnessing a fundamental reassessment of the value of virtually every asset everywhere in the world.

We are still in the very early phases…