The post you are reporting:
Mark - you take cases of where some poor and even criminal practise existed and are trying to portray that as a norm and you could not be more wrong. Some poor advice was given, sadly it does happen and to a large extent by the banks (look at ombudsman reports - this is part of what I refer to). But there are also many cases where it was good advice and highly beneficial to the borrower.
There is nothing new, bad practise or in any way shady about the bundling and selling of debt.
Corporate Bond funds, Sovereign debt funds, Strategic Bond Funds, High Yield Bond Funds and Global Bond Funds (among others) all operate on the basis of buying and selling debt. The biggest sellers of debt is the UK Treasury and with QE the biggest buyer is the Bank of England! I am recommending the best of these funds daily, (in fact I have just broken off from a report recommending one such now) and they are essential tools for investment diversification and volatility reduction for investment portfolios.
There was a problem that arose in the USA when some criminals tried to disguise toxic debt and hide its true nature from the markets. That is criminal fraud and there have been prosecutions. Once again you take an example and try to explain an extreme as a norm when it is far from that.
So what will be next with your cherry picking, Hedge Funds perhaps? Will I have to explain the important role that they play in the markets too? You can go on like this forever and get nowhere. Red-top stories are no substitute for the bare facts.
I did laugh when you suggest financial institutions 'convinced themselves that 'bust' would not happen'. These very institutions laughed at Brown thinking he was joking when he claimed he has 'banned boom an bust' they did not believe him and did not think he seriously believed it himself. Sadly they were wrong, he did believe it and that is why the man ran the while UK economy on that basis. Some, repeat some, banks and institutions made mistakes, yes - their adventures in the USA being one huge example but no-one made more mistakes or was more fundamentally involved in creating the economic conditions that are so damaging to all of us now than Gordon Brown.