I wish you could zoom in. I can't tell if my county is highlighted or not (Lake County, IL).

'Butterfly effect' and 'micro- vs macroeconomics' spring to mind, but as the article states and most of us knew already, the risk was spread over the entire global banking industry. How did 35 counties bring down the economy of the entire world? How over-leveraged (for lack of a better word from this layman) were these mortgages? Is this the end of free checking/debit cards?

The aggressive pursuit of subprime mortgages was highly localized. Mortgage lenders combed certain neighborhoods intensively and repeatedly and competitively because the demographics were likely to yield them the exact loan conditions they were now permitted to service. There was a good New Yorker piece on this a couple months ago.

How over-leveraged (for lack of a better word from this layman) were these mortgages?

Seriously. Derivative city.

desjardins, here's the Illinois map from the data originator. (Warning: slow AJAX-heavy site.)

Oh, and I hate sites like this that give you a "FREE 7 day trial" but don't tell you anywhere what it's going to cost you to keep it on the 8th day. Wankers.

Not all counties are equal. It wouldn't be surprising if the article said "the 35 largest cities in the country...", would it? Well, these are probably pretty closely equivalent to "suburbs surrounding the top 20 urban areas" -- high growth areas during the boom where there was open land for vast new developments.

Think of, oh, a match lighting a paper like the map on the Bonanza credits. The center hole is the built-up city. Not much new development possible there! The fire is burning a big growing circle around that hole, though. That fire is the equivalent of the growth area. And lots of growth areas have some geographic constraints -- e.g. Chicago can't grow east.