Bewildered by what happened on Wall Street? Furrow that brow no more. The Samizdat Blog financial research team has figured it all out. It's like this:
If General Motors behaved like Goldman Sachs, they'd make their money by taking out life insurance policies that paid off when drivers of Chevrolets died. Then, noticing that they'd make more money if more people died, they'd start building cars without brakes.
Seriously. This is exactly what credit-default swaps were like. Wall Streeters sold bundles of bad mortgages to pension funds and other investors, knowing these were bad. Then (this is the credit default swap) they bet that these bundles of crap would fail. They made money, and everyone else (the people who couldn't pay the mortgages they'd been suckered into, the people who rely on their pensions being there, etc.) lost.
Somebody's got to go to jail for this.