Economic Outlook: Price of dreaming To Wall Street, the financial crisis that erupted in 2008 was a serious business interruption that affected jobs and bonuses. The crisis also caused the collapse of Bear Stearns, Lehman Brothers, Merrill Lynch, Wachovia and a few others. Some of these, of course, were swallowed up by larger banks, which salvaged some of the financial jobs that would have been lost otherwise. To the public, the question is not just about accountants, but also about accountability. The housing market was not sustainable because -- so the theory goes -- banks had relaxed their lending standards to the point that they were selling riskier and riskier mortgages, which drove the price of houses higher, artificially, through increased demand, only to find the pricing support collapse when borrowers could not keep up with millions of loans. Worse, banks appreciate profits up front as much as the next business, so mortgages were bundled together and sold to other banks, to those willing to wait for 15 or 30 years for the profits to come in as the loans are paid month to month. Worse yet, banks also appreciate insurance on the risks they take, which partly explains the invention of the derivatives market, financial products that represent insurance for those holding onto risky assets. At the same time, derivatives are just another form of poker chips, another chance at buy-and-sell and speculation. Derivatives have value that rises and falls, a circumstance other high rollers cannot resist. The biggest financial firms, of course, set the bar on loan standards according to their needs. The Federal Home Loan Mortgage Corp., known as Freddie Mac, and the Federal National Mortgage Association, known as Fannie Mae, are considered "government-sponsored" enterprises in that they are private firms that try to represent the government's mission of helping citizens buy a home, a standard component of the American dream. With only what is written above to go by, two things become equally self-evident. One: This kind of setup has an enormous capacity to expand in value and to explode. Two: Finding a culprit in this mess is easy but assigning blame is difficult. With the best of intentions, Fannie Mae represents the American dream. With explosive potential, lenders recognize they can also support the dream and profit along the way. So Wall Street makes a few innocent enough side bets on the whole thing. Even if you point to the few companies that purposefully wrote fraudulent loans and exploited the system, the U.S. economy also rests on trade with other countries and relies on making products that others want. The country has to make a profit on the world stage and it is hard-pressed to do so when the jobs have been exported and the most volatile expense, oil, represents a profit drain year after year. On Monday, Bank of America and Fannie Mae announced they had settled their differences over loans that were badly written from January 2000 through the end of 2008. The bank agreed to buy back $6.75 billion worth of troubled mortgage loans and $3.55 billion to cover fees and other obligations. Fannie Mae gave permission for BofA to sell the service rights to about 940,000 mortgage loans to other lenders. The value of those loans, BofA said, was $306 billion in "aggregate unpaid principal." In total, the bank said, the agreements "cover loans with an aggregate original principal balance of approximately $1.4 trillion." That's the value of the properties without any interest piled on. That's the street value, in other words, for that portion of the street, the street on which a house might sit. In international markets the Nikkei 225 index in Japan dropped 0.83 percent and the Hang Seng index in Hong Kong was flat, off 0.01 percent. The Sensex in India lost 0.47 percent and the S&P/ASX 200 in Australia gave up 0.14 percent. In midday trading in Europe, the FTSE 100 index in Britain fell 0.29 percent while the DAX 30 in Germany shed 0.67 percent. The CAC 40 in France lost 0.75 percent and the Stoxx Europe 600 slid 0.33 percent.