Some wisdom from the magazine Der Spiegel in Germany of all places. It places the housing roller coaster in its proper context as part of a world-wide whirligig:

The global boom of the past 10 years has been driven by three flows. First, multinational companies shipped technological knowledge and business know-how to countries such as China, India, and elsewhere in order to set up supply chains there. This "dark matter" is not picked up anywhere on the economic data, but it was absolutely essential for juicing up global growth. In return for this flow of knowledge, the industrialized world -- and especially the US -- got back a river of cheap goods and services. Finally, to pay for these imports, the US borrowed a steady stream of money from the rest of the world -- roughly $5 trillion worth since 2000.

But here's the question no one really worried about: How did this money get into the country? The federal government borrowed about $1.5 trillion directly from overseas. But most of the borrowing -- perhaps $3.5 trillion to $4 trillion worth -- flowed through Wall Street in the form of corporate bonds, equities, and exotic securities. Wall Street firms were the major intermediary between the rest of the world and US consumers. For example, firms would package subprime mortgages into a complex security and then sell big chunks to overseas buyers.

This flow of money, an essential part of the global boom, explains why Wall Street was so prosperous in recent years --and why it failed so suddenly. Bankers, hedge fund managers, and other Wall Street types would take their piece of the foreign money as it came into the US. They grew rich that way. But when it became clear that US consumers could no longer afford to carry the loans, the financial flows froze up, threatening the global boom.

Thus, the financial crisis is a symptom, not a cause. At root, this is a crisis of the entire global economy as it has developed over the past 10 years.