you are probably correct in your assumption that *if* we had the perfect regulations than they could have countered the problems (which were caused by government intervention but that is neither here nor there). The problem is that no such omnipotent perfectly wise uncorrectable regulator gods exist to create these perfect regulations. So even if we assume, for the sake of discussion, that the housing bubble would have occurred naturally in a free market, it still isnt clear that regulations (created by real people not imaginary regulatory gods) would have improved this situation. This is of course assuming that the regulators are not perfectly wise but do have noble intentions. If we assume (and i think this is a more realistic assumption) that regulators pursue their own agenda and so are likely corrupted by the same institutions that they are intended to regulate than it is almost certainly the case that they made things worse.