For those who have been watching the real estate cycle there were some signs.

Sure... simple little cracks that show up when there is any expansion.

Ask a real estate agent for an opinion and you might here any of these explanations:

• Widespread availability of easy credit
• Consumers expanding use of credit
• Wild expansion of subprime lending
  
• Over-optimism among builders
• Entry of the casual investor/speculator

For an eye-opening view of the current crisis, sometimes it's advantageous to look at this under a different microscope. Such is the opportunity in this great article, "Property Bubble Leads to Crash Landing" by Bryan Cavanagh of "The Age" in Australia.

His claim is that U.S. Banks and the Federal Reserve failed the Risk Management test. This assertion he makes- in hopes that the same fix-up strategy could be avoided in Australia.

His assessment would include the following:

• Real Estate markets lead the economy
• Borrowing against property is a precursor to problems
• After-the-fact, "experts" create a "business cycles" excuse
• Everyone blames banks and borrowers

The solution? Practice better business management and learn to spot the precursors... among them- anything related to housing bubbles. The article sites Homer Hoyt, a 19th century land economist, who proclaimed that "A country cannot go into recession unless there has been a real estate bubble."

If this be the case, the Fed should have been taking a closer look.

In a 60 Minutes interview Alan Greenspan admitted that the housing bubble had caught him off guard. As opposed to housing, the Fed under Greenspan spent a great deal of time trying to balance the effects of expansion vs. inflation among the broader economy.

If such perils were known in the 19th century, let's hope our 21st century experts can spot the warning signs.