The MIT Blackjack Team Perspective on the Real Cause of the Financial Crisis

[Acrylicist]

Conclusion first for the tl;dr crowd:

The only solution is to forbid money management as we know it. We
could certainly have people like Warren Buffet manage investors' money
alongside their own, with no additional percent-based compensation
beyond their own investment gains. But we must remove the incentive to
create Martingales, and protect people from their own intuitive desire
to move their money into the funds which generate out-sized returns,
without understanding the long term risks which create them.

In our globalized free market world, almost everyone is ultimately an
investor, whether by owning a house or merely holding a job in a
company which depends on access to capital. The scope of the current
bailout has reached the point of real danger. We must fix the
underlying problem before doubling down again as a society, or risk
going the way of Albania.

Read the post for the meat instead of the mint:

http://semyondukach.blogspot.com/2009/01/real-cause-of-financial-crisis.html