Wouldn't any economist be able to say that the assumption that house prices will not move in a correlated way across the united states is patently false? It happened before during the great depression, and to some degree in the 80's and 90's. It was also clear house prices were in bubble territory by any sort of economic measure. While no one can accurately time the burst of bubbles there's enough historical data to be able to have an idea of whether things are over valued by various metrics.

What I'm saying it that I don't think that claims that bankers, who are sophisticated players and experts in their field, didn't know what they were selling. They should have known those instruments were not of the quality they represented them to their customers. I don't think shifting the blame to the rating agency holds water. At the same time they were giving mortgages to people who wouldn't "normally" qualify and where the risk was obviously very high they were selling pieces of those mortgages as AAA rated securities. Doesn't pass the red face test in my books.