Who actually accurately predicted this downturn and where are they on the economic compass?
An MRPA paper (Netherlands university) has looked into this. http://mpra.ub.uni-muenchen.de/15892/
I have summarised below:
Peter Schiff, Kurt Richbacher - Austrian School - emphasises savings and production against asset prices. (apologies to Wayne L)
Stephen Keen, Wynne Godley, Michael Hudson - Keynsian - emphasis on the accounting flow of funds approach (Says Law) - These guys have actually set up models that appear to have worked.
Sorenson, Baker - Financialization scenario - i.e. financial innovation will casue a liquidity drain at some point.
Schiller, Roubini, Janszen, Baker - Cycles theory, we were due for a downturn.
The paper is particuarly critical of neoclassical theory which failed to predict this occuring even at the late stages using the Equilbrium model. Specifically noted is the Washington University Macro Madel which is a massive dominant model.
I really liked the Keynsian model set up, but then I am a Keynsian fan. Bit of a big read but worth it.