Clinton thought it'd be a good idea to force banks into giving housing loans to people who couldn't afford to repay them, because it's "fair". Plus the world economy is all interconnected so when that goes down it drags ours with it and vis versa. Also do a google search on Fanny Mae and Freddie Mac.
The US recession was caused by irrational exuberance in high technology. In addition, the recession was also caused by the rise in mortgage delinquencies leading to foreclosure of houses and ultimately a credit crunch leading to a freeze in liquidity. For more information, check, http://www.millionaireacts.com/432/what-caused-the-recession.html.
As far as I can tell it was the lending of money for mortgages to people that couldn't afford the monthly payments. That and the price of gas spiking to $4 a gallon 2-3 years ago. That brought the economy to a screeching halt.
CDO's... Led to the biggest housing market crash in our history .. Collateralized debt obligations .. Loans were bundled together "A" paper loans were bundled with "D" rated paper.. And sold in large quantity on our stock exchange.. Even our rating agencies gave them a AAA rating... Loans started defaulting in a landslide.. Our housing/banking market collapses over night.. Along with the credibility in our credit ratings ability to be unbiased .. This along with some answers listed above... We still have not begun to climb out