While the total loss has yet to be determined, the excesses of single-family residential lending have been largely revealed as the latest chapter in the long running story of financial structuring, inadequate regulatory oversight and myriad conflicts of interest. To some, the alchemy apparatus of Wall Street — SIVs, CDOs, MBS, etc. — were viewed as the tools of a golden age of global finance. Indeed, for a time, it seemed as though credit would expand indefinitely, risk no longer existed and the bankers that delivered this golden goose would prosper mightily. The downfall of this sophisticated “repackaging Ponzi scheme” turned out to be the failure of a fairly simple and reasonable assumption: Home prices do not go down everywhere at the same time. In more formal terms, a wide range of these securities assumed very low levels of systematic risk and very easily diversified idiosyncratic risks. While investors may have been correct about the latter, they clearly, in hindsight,