What Happened in 2008? Some say "housing crash" but I suspect the existing global banking system imploded.  Am I off-base, or ...?

In my experience, CME S&amp;P futures, for example, require a performance bond of something less than 10% of the market value of the underlying asset(s) to open a position, i.e. healthy leverage is baked into the product.  As I calculated back then, TARP and TARPII literally provided enough capital to purchase the entire US stock market via futures contracts.

Today, a decade later, the run on global banking seems to continue.  "Buy gold bcs you can't trust governments or banks" commercials come on TV about every 15 minutes. Also, inflation continues to outpace return on bank deposits, i.e. negative real interest rates.  Punishment for holding cash; and we see several Nations outlawing large denominations of cash.  Gold has been repatriated out of NYNY in masse.

Did the global banking system collapse in 2008, or was it simply a housing/mortgage issue?  Lastly, if it did, my understanding is that like 99% of $100 bills notes are held outside of the USA.  Why didn't the Fed simply declare bankruptcy, void all those notes (and all those complex derivative contracts), and start over with new money?  Why the fake?  The sun's going to come up tomorrow regardless...?
To sum up the 2008 crisis in a few bullets:


Loose lending policies by government and private institution caused regular (and poor) folk to become real estate speculators.
Housing prices declined rapidly, causing foreclosures.  This caused banks and investors to lose money and put the housing/construction industry on hold, causing unemployment.
Many mortgage-backed securities were based on the value of real estate and their risks had not been taken into account by investors, who were unprepared for losses.
Financial institutions were highly levered and tightly connected with each other by contracts and derivatives that lacked transparency, causing a crisis of faith in these institutions.
Government bailouts were reasonably successful in keeping the problem contained but at great cost and setting a questionable precedent.
Since then the financial system has recovered and done very well.


The low real interest rates you mention isn't a problem with the banking system, it's a simple problem with too many parties (globally) wanting to save and not enough wanting or being able to borrow.  The latter effect is partly because of government and bank reluctance repeat the same mistakes with loose lending and partly because we don't have a lot of good real investments available to us.


  Some say "housing crash" but I suspect the existing global banking system imploded. Am I off-base, or ...?


Yes, you are off base.  The banking system, and financial system in general, temporarily lost a lot of value and suffered from a credit crunch but have since recovered and are doing very well.


  As I calculated back then, TARP and TARPII literally provided enough capital to purchase the entire US stock market via futures contracts.


Posting margin to take a large position in futures contracts is very different from "purchasing" the stock market. I don't understand how this is related to your question, though.  Using bailout funds to speculate on the market seems like an odd idea.  Note that TARP funds were loans, which have been repaid and made the government a tidy profit.


  Did the global banking system collapse in 2008, or was it simply a housing/mortgage issue? 


Again, it didn't collapse, but it did suffer.  The housing situation was the precipitating event but there were a number of problems that came to fruition at the same time.


  Lastly, if it did, my understanding is that like 99% of $100 bills notes are held outside of the USA. Why didn't the Fed simply declare bankruptcy, void all those notes (and all those complex derivative contracts), and start over with new money? Why the fake? The sun's going to come up tomorrow regardless...?


Why would the fed want to declare bankruptcy? If it tried to void our currency there would be negative global economic and political repercussions the likes of which we have never seen.  I cannot imagine this happening nor why you would think it would be a good thing.

Is there a reason you think voiding derivative contracts would be a good thing?  Those are contracts parties voluntarily engaged in, many of which are necessary to provide stability to both or at least one participant.  During the crisis the fact that big banks were involved in so many derivatives undermined their credit-worthiness because people couldn't be certain how much risk they had.  But that is a very, very far cry from saying that it would be a good idea to void derivatives, or even certain classes of derivatives.