[Puts]

It's actually interesting that a lot of countries has laws regulating gambling because of how destructive it can be for an individuals economy, life and general health. Yet, it's still possible for rich people to gamble using thousands of peoples homes and jobs as insert on the stock-market.

[rbinv]

> Yet, it's still possible for rich people to gamble using thousands of peoples homes and jobs as insert on the stock-market.

Trading instruments like mortgage-backed securities does not constitute "gambling with people's homes." It's not like someone's taking your home away just because of some CDO trades.

"Activist investing" (think Icahn) might, albeit indirectly. But that certainly doesn't make up a big chunk of the market and its activites.

[Legogris]

2009 disagrees.

[rbinv]

Who exactly lost their home while paying their mortgage on time?

I'm not saying that the GFC wasn't massive (it was) or that people didn't lose their jobs and homes (many did), but MBS were not at fault. Subprime lending was, among other factors.

[ashtonkem]

MBS were the engine that kept a housing mania going. But as you said, they didn’t make people over leverage their own houses.

Arguably the originator banks deserve a lot more blame for that, since they actually were the ones willingly handing out bad loans and/or encouraging bad consumer practices.

[Cthulhu_]

How many people lost their jobs and got into financial problems, is the question you should be asking.

Answer: unemployment went from 4.6 to 10%, and it took eight years to recover: http://infographic.statista.com/normal/chartoftheday_8974_us...

[ketzu]

A lot of countries have laws regulating stock markets.