One of Zero Hedge's all time favorite charts is the following, which demonstrates the full breadth of Wall Street "complexity" ingenuity, and highlights the incremental layering upon layering of hollow synthetic securities in the form of "leverage" that allowed the housing boom to explode to unprecedented levels, and to create artificial money flooding the shadow banking system which among other things was used to pad ridiculous banker bonuses over the past decade.
Today, Citi's Matt King has taken a humorous approach on this topic, and has concluded that in order for investors in a CDO2 to have a complete understanding of all the nuances in their investment (based on filed information), they would need to read precisely 1,125,000,300 pages worth of information for every CDO2 purchased to be aware of everything that was being acquired. And this even ignores the fact that recent robosigning revelations may have rendered the entire reading process moot as the entire RMBS foundation may have been built upon a complete sham.
Has anyone ever done this? Of course not. In fact, buysiders would be lucky if anyone even read 1 page when they bought something. This is precisely the reason why Goldman et al relied on the "sophisticated investor" myth to peddle toxic products which eventually imploded and nearly took down the financial system with them. It also explains why everyone relied in the rating agencies which were nothing more than an aggregator of group think, allowing this 1 billion plus pages to be trickled down into a simple phrase, most usually AAA.
We now know how Wall Street's laziness ended up impacting the entire world, and with tens of trillions of dollars pledged by global central bankers to prop up the collapse of the shadow system, and effectively being the sole and only reason for the existence of QE1, 2, etc, the most simple explanation of what quantitative easing is simply Ben Bernanke's way to atone, using taxpayer money, for the laziness of aan entire generation, which confused staring at a Bloomberg screen with work, and assumed that gargantuan pay offs are an equitable trade off for making the worst and most uninformed bet in history.
Instead of hiring an army of RoboSigners, BofA et al should have instead hired millions of RoboReaders. Perhaps then, and only then, would someone know just how far up the creek we are currently, with absolutely no paddles.