When discussing the crisis itself, he commented that no one had modeled what would happen if housing prices fell. It all seems so obvious now, but the biggest issue with any financial model is (are) the key assumption(s). You can model anything, of course. Just tell me what the assumptions are! It reminds me of a joke I learned when I was an economics student at the University of Chicago. It's the only economics joke I know. Here goes:
A physicist, a chemist and an economist are trapped on a deserted island, and they have a large crate of canned food without an obvious way to open the cans. The physicist suggests, "Let's tie vines together, throw them over the branch of the coconut tree and use coconuts to force open the cans by bouncing the coconuts off the cans at the correct angle."
The chemist responded, "That's absurd. Let's use the sea water, some sea weed and the sun to corrode the tops of the cans off."
The economist averred, "You're both wrong. Assume you have a can opener."