Originally Posted by NuGuy

Yes, there was market "exuberance" over mortgage based securities, but the collapse of the real estate markets due to defaults on sub-prime lending wasn't what torched the world's economy. Yes, it was bad, but alone would have been just "Savings and Loan Crisis" bad.

Rather, it was the all the derivative products (the bets on bets, and bets on bets on bets), that truly magnified the result exponentially, and sank the whole world.

When I see crap being hawked on late night TV (gold, real estate, etc), that's my indication to exit the pattern.