Though the plot is the same 10 years later, a different actor is playing the lead. In 1997, Asian countries sent ripples through the global financial system, beginning with Thailand's devaluation of the baht after a collapse of the nation's real estate bubble. In 2007, it is the U.S. and its subprime mortgage borrowers causing the greatest disturbance in credit markets in a decade. At the root of the turmoil is aggressive lending to American home buyers who previously were unable to obtain credit. Financial engineers pooled these loans together and sold off pieces representing different presumed levels of risk. In...
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