... market distortions, and financial innovation created the toxic mix of conditions making the U.S. the epicenter of the global financial crisis. Outside the U.S., exchange rate and other economic ... Midwest, and then, much more rapidly, in California, Florida, Arizona, and Nevada. The stage was set for the more general financial crisis that finally erupted in August 2007. Global Imbalances ... in the U.S. deteriorated. Figure 13 shows how subprime and nonprime mortgage originations more generally jumped up in 2004. At the same time, the share of 29 For a useful chronology and...