If you’re still confused about how the sub prime crisis came about, you should check out what we are just going to show you. Wikipedia, the sum of all human knowledge, explains the ‘Subprime Mortgage Crisis’ as

The subprime mortgage crisis is an ongoing economic problem which became more apparent during 2007 and 2008, and is characterized by contracted liquidity in the global credit markets and banking system. The downturn in the U.S. housing market, risky lending and borrowing practices, and excessive individual and corporate debt levels have caused multiple adverse effects on the world economy. The crisis has passed through various stages, exposing pervasive weaknesses in the global financial system and regulatory framework.

If you still find that a little, uh, complicated, you might want to check out the cartoons talking below.

Cross posted from Gyaan Sutra