Over at my “Inner Workings” blog I review how the crisis began, republishing material I had gathered and printed in a somewhat different form during 2006 for Cantor Fitzgerald. I showed in some detail during January-February 2006 that foreign flows were massively distorting credit and mortgage returns. Once returns to prime assets collapsed due to a gigantic overseas bid, investors were forced to go to subprime assets. It was all obvious in 2006. Follow the link for the data.