So we haven't solved that problem yet?

All bubbles occur because of human greed. But this time, the greed factor was not quite as obvious because it occurred behind the scenes -- in the trading rooms of the investment banks that created a huge, unseen network of banking contracts with institutions around the world.

Sure, many individuals were greedy to buy homes they couldn't afford, or to earn commissions selling mortgages that were not likely to be repaid. But at the root of it all was the ability to "structure" those mortgages into securities that were endorsed by the rating agencies (who were paid to do so) and then distributed around the world into the financial system greedy to get high yields on "safe" investments.

Turning those bad mortgages into highly rated securities represents the 21st century version of ALCHEMY -- the ancient hope that you could turn base metals into gold!

[From Can world fix Humpty Dumpty markets? :: CHICAGO SUN-TIMES :: Personal Finance]