I understand the article to imply that we need more government regulation because the market cannot correct itself for pyramid schemes without severe devastation to the economy (the Albania example).

For me, this argues conclusively that Fannie Mae and Freddie Mac may have been the triggers for the current crisis but not the cause (in themselves, they were not sufficient to cause the crisis). From the article's analysis, the real cause of the current crisis was the lack of regulation of mortgage swaps. The trillion-dollar mortgage swaps is what amounted to the Martingale system.