Narcissism and the Panic?

Bloomberg ran an opinion piece today about how narcissistic Ivy League MBAs killed Wall Street because they were too self-confident and trusting in their risk models. There may be something to that; the great book on the Enron collapse is titled The Smartest Guys in the Room, and, IMHO, the recent panic has rather a lot in common with the Enron collapse. However, I've also read that the risk models were adequate for evaluating the risks of individual security products, but did not take into account that CDOs, default swaps, and the like were really a chain of dominoes. All it took was a dip in the real estate market to start the dominoes going.

What I always wonder in the wake of ginormous economic collapses is why so few people seem to want to take a look under the proverbial hood, check out the engine, and ask the question, "how do these people make so much money?" It seems pretty basic. Actually, it is a question that Warren Buffet considers, and he will not put his money into anything he can't understand.