It's not a "subprime mortgage crisis." It's a "derivatives abuse" crisis.
The world's exposure to Credit Default Swaps is currently larger than the world's Gross Domestic Product. Much of it is "naked"--not insuring a derivative held by the CDS owner. Any naked CDS is a gambling instrument equivalent, in my view, to a lottery ticket...except that if you play the lottery and lose, the government doesn't give you your money back.
The other derivative of concern is the Collateralized Debt Obligation, which is based on derivatives they couldn't move any other way. Check it out: I can loan you $100,000 to buy a house, then securitize that into a mortgage-backed security, securitize the MBS into a CDO then securitize the CDO into ANOTHER CDO! If you lose your job and your mortgage goes into default, four financial instruments break: the mortgage, the MBS and two CDOs. Plus at least three CDS.
Incidentally, MBS aren't just for subprime debt--Fannie Mae, who deals mainly in prime paper under $240,000, sells them too. If your loan is above $240,000 like most McMansion mortgages are, it will be securitized in the private placement market because Fannie Mae doesn't want it.
The sooner we get it into our collective thick heads that Structured Finance will kill the world financial markets if it's not reined in, the better off we will be.