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I read recently that the real estate bubble is currently hndreds of times bigger than the dot com bubble and that the world has never seen a bubble so large when measured in USD.

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I don't have a link handy but compare real estate prices in Tennessee and Southern California then tell me there's a real estate bubble in Tennessee. Mentioned many times on this forum real estate markets are localized and not ubiquotous. There was a blurb in the WSJ about rental prices. To pick on Tennessee and California again, California markets occupied 5 of the highest rental price markets while Tennessee had two of the lowest. I'd also point out that in the Mortgage Backed Secuirty (MBS) area (securitization of real estate loans) there are all kinds of bonds with various ratings and the MBS market is bigger than the U.S. treasury market. I trust the agency ratings of MBS more than I do for corporates. In other words a AAA rated MBS is more secure to me than a AAA rated corporate. IMO if the real estate market slumps in SoCal, we'll see the speculators take a bath but so what?