Saying "nearly everyone" was wrong and blindsided by it is a bit of a stretch. Not everyone that saw it coming profited from it big like the now fabled protagonists in The Big Short. But to people who chose to pay attention to it, the issue was known and well publicized ahead of time:

https://youtu.be/tZaHNeNgrcI

https://youtu.be/kFd8YluIVG4

The key to 'seeing it coming' of course, is to first willingly accept the possibility that something might happen, and then actually look into it. The issue was that many people were just not entertaining the possibility at all, and therefore not bothering to look into it. The information was all there for anybody to see, but this was a case of people missing the gorilla in the room because they were too busy paying attention to the game[0].

[0] http://www.livescience.com/6727-invisible-gorilla-test-shows...

Nobody with any experience was surprised by the housing collapse. The only people I know who were surprised (in the financial industry and out) were people who've honestly never considered the numbers for even a minute.

Housing prices have to track rent, to some degree, and vice-versa. One of them will change to match the other and wages were not going up...

All the ARMs and layers of CDOs are irrelevant. They multiplied the results but didn't change the underlying issue. Leverage doesn't help you when the fulcrum shifts.

Or you could say, nearly everyone else was wrong as a result of him being wrong.