Greed hardly escalated the situation, what escalated it was government legally making it so money could be lent to those who cannot afford it.
What idiot would seriously lend money to people knowing full well it cant be repaid? Governments have alot to answer for in the US.
Greed wasn't the primary cause however it did escalate the situation. The guys short selling the low doc loan bonds magnified the problem significantly. Having said that, what they were doing is/was perfectly legal and was done routinely around the world. If I had known about it, I would have done it too.
Currently short selling and many other derivatives are banned from the ASX and other major stock markets around the world as a measure against the current crisis however it will be lifted shortly.
For those that don't know - short selling is in effect selling stock now that you don't own and betting that you can buy it at a certain some time in the future at a lower price (ie hoping that the share price will go down).
This is the opposite of the traditional "long" positions where you buy a stock now and hope that the market price will go up into the future and sell it at a profit.
Reaper
(Reaper has explained this now so finally I understand why they didn't care)