TOO CLEVER BY HALF?

In an audio interview, Gretchen Morgenson of the NY Times explained that the wizards on Wall Street repackaged sub-prime loans into AAA securities. The recent rise of defaults and late payments of these loans led investors to markedly devalue them, leading to a credit crunch because so many had been using these securities as collateral for loans.

This pic shows that the central banks stepped in to provide at leats temporary market liquidity (from the WSJ):