A few other factors from recent discussions with various friends:
1) As more folks start cashing in 401k's, they are going to be taking tax hits on this money that has been tax-free up to that point. Given that the AARP is such a powerful lobby, what are the odds of pressure being put on Congress to forgive taxes on withdrawals, too? What will this do to revenues at a time when the whole Social Security system will be on the brink of collapse? Fire up the printing presses!
2) Yes, most of the mortgages that are likely to go into foreclosure are concentrated in a few states, and no distinction is being made about how many of those are held by "flippers". Still, what are the odds that whole blocks in some places like California or Florida could wind up vacant and up for sale? How prevalent can vandalism get in a neighborhood like that? Will we hear about "crack blocks" instead of "crack houses"?
I'm no expert and this is all idle speculation. Feel free to set me straight in Comments...