Economist's View: Paul Krugman: Coming Down to Earth: "Over the last few weeks, however, gravity seems to have started reasserting itself."
The end of the housing bubble seems to have come. It will not affect the whole country, because the housing bubble was local, not national. But, in places like Las Vegas and southern California, it is going to be a very big deal, and it will snowball over the course of years, to depress the local economy.
If it does trigger a fall in the dollar, that will be national.