As if the subprime crisis weren't bad enough, at least one expert here is already predicting the next big crunch area: credit cards. Ken Rosen, a UC Berkeley professor in Davos as a special adviser on real estate for the World Economic Forum, says that the industry has been pushing credit cards "to all sorts of unsuitable people." As with the mortgage crisis, he says, lenders aren't checking to see if borrowers can afford to re-pay the money. And that trend could affect car loans as well, he says.

While Rosen waits for the credit crash, he's expecting the mortgage situation to get worse too. The current delinquency (foreclosure) rate on the $1.2 billion outstanding in sub-prime loans is 10 percent; he predicts it will rise to 30 percent in the next 18-24 months. "It's going to get worse before it gets better," he says. "And if you add a recession to that, it's going to get very ugly." Nor does he think the rest of the world can be immune because "decoupling is a myth."

Does Rosen agree with the view among some European executives that the problem was caused by American greed combined with the Bush administration's bad policies? "I wouldn't say it's greed," he says. "It was the system of securitized finance that led to a misalignment of interests." Still, he doesn't want to let U.S. consumers--or regulators--entirely off the hook. "What we've done," he says, "is bought things we don't need with money we don't have." Not a habit that's easy to break.