Housing Bust...Update

How is it that the housing bust in the US can affect the rest of the world? I'm glad you asked. The Daily Telegraph does an excellent job of explaining. They are having a run on a bank called Northern Rock in the U.K. The news doesn't get much better from there concerning the housing debacle launched by our good friend Alan Greenspan, who now claims that it wasn't his fault. What a laugh! The Financial Times quotes him here parsing the difference between "froth" and "bubble." When he was chairman of the Federal Reserve the housing market was "frothy," but now that he is out, it has become a "bubble."