Mark Twain famously observed that history does not repeat itself but it does rhyme. Considering how Europe's sovereign debt crisis is playing out, one has to be struck by Mark Twain's prescience. For the European sovereign debt crisis bears an uncanny resemblance to the 2008-2009 U.S. financial crisis.

The latest interest rate cut is too late to prevent a recession in the first half of 2008, but it does give hope that the Federal Reserve will not repeat the mistakes of the Great Depression.

What can Wall Street analysts tell us about the U.S. housing market and the subprime mortgage lending crisis?

In 2008 Barack Obama was propelled into office largely by a financial crisis. The main difference between then and now will be that this crisis did not originate in the US, but in Europe. And it will be one over which President Obama has no control.

Requiring mortgage originators to hold at least part of the mortgages they originate would establish powerful incentives for all originators to exercise better due diligence in making loans.

A key lesson that should be drawn from the bursting of the U.S. housing market bubble is that the Federal Reserve can ill afford to be derelict in the exercise of its regulatory responsibilities.

The Federal Reserve should stand ready to soften the fallout from the coming housing bust.

The European sovereign debt crisis is now entering a critical phase, which U.S. economic policymakers would be ignoring at their peril. And if there is one thing that policymakers should have learnt from the Lehman fiasco it is that a banking crisis in a major part of the global economy can have serious economic and financial consequences for the rest of the world economy.