When you break down the complex gamut of the causes of the crisis, several skeletons tumble out of the cupboard. Almost all of these relate to how the financial system operated. In a phrase that has now become daily staple, sub-prime borrowers were given loans at teaser rates.
And these borrowers were led to believe that they would never lose as the price of the house they were buying will only keep going up. The loans were sliced and diced, built into complex products and rated by rating agencies. Dazzled by these ratings, gullible investors lapped up the mortgage based assets (MBA) not realizing the risk they were taking.