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Whenever financial markets unravel, everybody wants to ID the catalyst.  This is what caused the market to crash, or that is the reason why the markets is stinky.

Sorry to report -- markets don't crash on a single piece of news.  Don't believe for a second that New Zealand is the reason why the world is fleeing from U.S. mortgage-backed securities like cats from the Westminster Kennel Club.

And yet, that's what some pundits went on record with last Thursday when markets had their worst day in three years. 

Actually, I think somebody in the know went on record with the New Zealand bit early and then everyone else -- perhaps looking for that single reason -- jumped on the bandwagon.  It seemed like a plausible reason.

But was it?

The real story of why mortgage bonds tanked following the news from New Zealand is one that we talk about a lot over here at The Mortgage Reports.  The global economy is one big balancing act.

Growing up, I used to love the game Don't Tip The Waiter.  The waiter was this cardboard thingy balanced on a rocking chair-like base.  The object was to load as many dishes, plates, and dollar bills onto his server's plate without causing the rocking chair to pitch too far forward or backward.

If the waiter "tipped", all of the dishes fell and you lost the game.  Think "Jenga" but so much cooler for a 5-year old.

This is why the New Zealand explanation is bogus.  It's not the last event that happened before the crash, it the combination of every event leading up to and including the crash.

New Zealand merely "tipped the waiter".

Dan Green is an active loan officer. Email or call 513-443-2020. Dan is on Twitter at @mortgagereports.