You're confusing fraud with poor business decisions. The economic damage happened because people got irrational about the housing market for various reasons. T

You're confusing fraud with poor business decisions. The economic damage happened because people got irrational about the housing market for various reasons. The result was poorly priced loans that were bought with extreme amounts of leverage (100x was not unusual). When your collateral turns out be worth a fraction of what you thought, your lenders get prickly and want their money back. Except there is no money. Take that and spread it all around the world, and you have a mess. Fraud, although I'm sure there was a bunch of it (as there always is) that really had nothing to do with it. Don't look for conspiracy when incompetence is staring you in the face. This was not a financial industry problem. It was created by unrealistic homeowners, opportunistic bankers, stupid politicians, and a culture that says (for some reason I can't fathom) that home ownership is inherently good. In other words, just about everyone. If you bought or sold a home in the last 10 years, you contributed to the mess in your own tiny way. And yes, it will happen again. Not one thing of substance was done to stop it after the fact. In fact, the government (yes, that's our fault again) has increased the likelihood of future meltdowns by introducing an unprecedented level of moral hazard by bailing out troubled entities.