Interesting OpEd piece in the WSJ today by Alan Greenspan on the mortgage crisis.
The 100 word version:
The fall of communism opens up new labor markets who’s biggest export was deflation. Developing countries saved too much driving global long term interest rates to record lows, fueling a speculative bubble. Central banks raised short term rates, but to no avail, long term rates driven by market. For years market mispriced (risk of) mortgage debt, then suddenly reset risk premium, seizing credit markets worldwide. You lose your house.