The US housing panic and mortgage meltdown will be felt around the world. The innovation of CDOs spread the US cancer everywhere.
As home prices crater, foreclosures soar and the US housing market implodes, people around the world will wonder how idiots like Casey Serin, Angelo Mozilo, Alan Greenspan, Bob Toll and David Lereah took down the global financial system.
We live in interesting times HP'ers, and you're at the center of the storm. Buckle up, it's gonna get bumpy.
With the risk of US mortgage defaults now dispersed globally, not just Americans but everyone else in the developed world has an interest in averting an escalation in US defaults.
There is also a global search for culprits. Alas it turns out that almost nobody is blameless.
The importance of US housing is hard to overstate. For at least a year now, a central risk on investors' radar screens has been that falling house prices would force US consumers to spend less. That could cut global demand. Housing data this week was that US house prices were falling and the overhang of unsold properties was rising.