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While I would agree that it is affecting the globe, it is a Made in America problem.
The whold sub prime mortgage fiasco was born and raised in the USA.
Things were too quiet in the mortgage industry. There was no large growth, no big action, no excitement.
How do you create growth in a fully mature industry?
Well, you make lots of loans to people who really can't afford to have a mortgage. Suddenly, you are issuing lots of mortgages and growth is up. Way up.
Then you sell the debt and you walk away with shit loads of money and make the debt someone else's problem.
Who's problem you ask.
Well, obviously Bear Stearns for one. They bought up shit loads of debt without doing their due diligence. So much for all those MBA's now.
You don't hear of such bullshit here in Canada, or in Europe. Our banking system is much more regulated and they don't run around throwing money at people who have no way of repaying it.
Canada does not have a sub prime mortgage problem, but we're going to feel the impacts of the one that's happening down south.
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