Think of the US mortgage and credit market as a giant pyramid scheme. The people closer to the top of the pyramid usually get out relatively unscathed. But the investor closer to the bottom of the pyramid end up with nothing.
That would explain why US markets faired relatively better than India, China and other countries of the developing world who seemingly ended up lower down the chain in this massive pyramid scheme.
Here's a link to George Soros discussing his trading philosophy and how he did so well in 2008 relative to the rest of the world - drink your strong coffee before you read it.