Big money + Incredible Complexity = DISASTER
I finished watching "Enron: The Smartest Guys in the Room" last night.  I read the book last year, but figured this was as good a time as any to watch the documentary.

The situation with Enron was, of course, reminiscent of what's been going on in the news in the past few weeks and months.  A seemingly solid company all of a sudden collapses because of rot on the inside -- overly complex financial transactions that seemed to be worth billions, but turned out to be virtually worthless.

Now, what happened at Enron was at least partially due to outright fraud, and I'm not particularly convinced that the failing banks and other institutions are guilty of anything that simple and specific.  But it's clear that, just as with Enron, bankers, traders, and executives gambled big money on transactions whose incredible complexity disguised their actual risk.  Financiers saw huge upsides, and ignored or missed the huge downsides.

It seems to me that these problems would be greatly lessened if finance could somehow be simplified.  You get a mortgage from a bank, that bank is responsible for collecting on the mortgage.  You put money in a mutual fund, that mutual fund invests in stocks, bonds, and other securities that are CLEARLY linked to reality.  One or two levels of indirection max before you get to someone who actually sells *stuff*.  Risk is part of capitalism, but in order to work, it has to be understood.