I totally agree. In fact, I read the spirit of your quoted section as they did a bunch of fancy technological analysis and fooled themselves into believing what they already wanted to believe: that there was no risk and all upside. It reminds me of an exchange of my other piece of financial journalism on the crisis, This American Life episode "The Giant Pool of Money":

Alex Blumberg

It's easy to ignore your gut fear when you're making a fortune in commissions. But Mike had other help in rationalizing what he was doing, technological help. Mike sat at a desk with six computer screens connected to millions of dollars worth of fancy analytic software designed by brilliant Ivy League graduates hired by his firm. And this software analyzed all the loans in all the pools that Mike bought and then sold. And the software, the data, didn't seem worried at all.

  Mike Francis
  All the data that we had to review, to look at, on loans that were in production, that were years old, was positive. They performed very well. All those factors, when you look at all the pieces and parts, and you say, well, a 90% no income loan three years ago is performing amazingly well. It has a little bit of risk. Instead of defaulting 1 and 1/2% of the time, it defaults 3 and 1/2% of the time. Well, that's not so bad. If I'm an investor buying that, if I get a little bit of additional return, I'm fine.

Adam Davidson

Wait, Alex, I want step in here, because this is a very important piece of tape. A big part of this whole story, the whole crisis, is that a lot of really smart people, people who knew better, fooled themselves with this data. It was the triumph of data over common sense. Can you play that tape again?

Alex Blumberg

Yeah, sure. Here you go.

  Mike Francis
  All the data that we had to review, to look at, on loans that were in production, that were years old, was positive.

Adam Davidson

As we now know, they were using the wrong data. They looked at the recent history of mortgages and saw that the foreclosure rate is generally below 2%. So they figured absolute worst-case scenario, the foreclosure rate might go to 8% or 10% or even 12%. But the problem with that is that there were all these new kinds of mortgages given out to people who never would have gotten them before. So the historical data was irrelevant. Some mortgage pools today are expected to go beyond 50% foreclosure rates.