Let's cut the shit -- these people are nothing but legitimized bookies, and bundling other people's debts into derivatives and CDOs and such does not generate real wealth, it only maneuvers phantom assets.
Inevitably, when the playas have to scramble and bail each other out, comes the plaint that the big bad ol' state must do two things: step in and regulate (where before it was vital that they absolutely not interfere), saving the suckers from predators and the predators from their own blind greed; and bail the high-rollers out. I mean, if these guys lost out, and took their toys and went home in a huff, who would keep our Wall Street action alive with liqidity puts and bundled default hedges? Besides state and county governments and pension funds, that is.
This is "spreading risk" in roughly the same sense as a football pool. It's just that these puds went way out on the margin to bet on the Bears, and now that they turn out to be a crappy team, the high-rollers are trying to figure out how they'll pay up without losing a kneecap or the deed to their house.
The only surprise here is that Neil Bush isn't somehow involved in it, though funnily it appears Jeb might know some of the playas. It's in their DNA apparently.
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