Not only were the investors caught unaware. Many executives and board members of these firms and others didn't understand how highly-leveraged and risky the contracts were.
Regulations need to be put into place to fully and accurately inform investors, and the public, of the risks.
Although much of governmental market regulation hampers productivity and siphons off potential profits, there's no doubt that the public must be aware of the financial risks associated with these and other similar hidden investments that many firms still hold. Thank goodness our local banks apparently didn't invest in these murky, risky investments.
Unfortunately, it looks like the Wall Street executives that devised these catastrophic contracts will be able to go about their lives without much change in their lifestyle, while the rest of us will be paying for the financial bailout for decades to come through taxes or defunct investments, and may have to radically change retirement plans.
Also, in the past seven years or so, a lot of people with a limited budget were trying to get into ritzy, cavernous homes in suburbs around the nation.
Now, unfortunately, all of us will in essence be underwriting the foolish home purchases as their homes will be protected from foreclosure by the government, and according to one of the bailout plans, we'll all likely be paying off a portion of their mortgages on their Hollywood-ish homes through our taxes.