In the U.K., the bell tolling for housing market has a familiar ring to it

In short, a housing correction is at hand, necessary, and U.K. public officials should not try to prevent it, Wolf said. Nor is the correction likely to end soon. Comparable corrections are also occurring in the debt markets. Wolf does approve of monetary policy to provide liquidity, maintain orderly markets, and manage the economy through this correction, but the idea of a government policy to keep housing expensive - - i.e. maintain a stretched market - - is insane.

Further, U.K. fiscal stimulus remains only a modest tool in the current fight against recession, due to the U.K.'s outsized public spending during the previous boom.

Economic Analysis: Wolf offers sobering statistics on the state of the U.K. housing market, and its immediate prospects. And while some U.S. investors/readers may argue for a replication of his tough stance in the U.S. regarding a potential housing market bailout, the U.S. market's complexity and size speaks against that. In other words, bailing-out investors who leveraged inadequate equity to build speculative condominium complexes in Las Vegas differs substantially from a policy that would prevent massive owner-occupied home defaults from triggering a large recession.