Instead of lending money based on credit worthiness, mortgage companies lent money to anyone they could talk into taking it.
Then the mortgage companies insured these mortgages against default through insurance companies.
The insurance companies then sold the insurance policies as securities on the stock exchange.
So when people defaulted on mortgages they couldn't afford to begin with, that were sold to them knowing they couldn't afford them, the mortgage companies failed, the insurance companies failed and the securities companies failed.
Doing this was illegal until Phil Gramm, John McCain and others made it legal.
No one who understands the fundamentals of economics, lending, insuring or investments would ever do this. It shows a complete disconnect from reality; it is ignorant beyond belief.
No one who thinks this way should be running a lemonade stand, unless it's at a federal prison.