Mortgage securitization wasn't just a way for Wall Street to fob off risk on naive investors; big firms on the Street loaded up on the unsound bonds for their own holdings. The designers of the new mortgage tools didn't think housing prices could only go up. Executive compensation practices weren't just a "heads we win, tails you lose" game. And more [Hoover Policy Review via Business Insider]
More: In an energetic response, Felix Salmon says "Jenkins's attempts to let Wall Street off lightly simply don't hold water"; Wall Street firms never expected to eat as much of their own dog food as they wound up having to, the structure of securitization discouraged fundamental analysis of what widespread defaults would do, and the perversities of compensation are not limited to problems of inadequate "skin in the game" (or to executives as such, given the central role of traders).