Razib Answers My Question
I recently asked (with more comments here):
The normal operation of the financial markets should confine problematic debt in a small part of the system where people who specialize in risky investments can deal with it. In other words, what were those financiers smoking?
Razib has some reasons to conclude it was speed
So here's my explanation of the present Collapse of Western Civilization: amphetamines. The world of finance is a rather small one, populated entirely by supersmart, extremely aggressive and competitive men (mostly) who have to go at top speed twelve or more hours a day, day after day. How do they do it? Performance-enhancing drugs, that's how: legally-prescribed amphetamines. (Cocaine is uncool, and so Eighties.)
Maybe the drugs being used by financiers should be included in annual reports.