"I think there is a very plausible argument that the financial disasters we are currently going through are largely due to people acting on fashion and opinion without trying to form a rational basis for what they are doing. "

There is a certain logic to that. The people who LOST money in the housing market did so mostly because their faith in the often repeated mantra. "Housing prices in the US never go down."

On the other hand, holding the "Masters of the Universe" in Wall Street and The City of London and the financial press to a couple of biblical truisms "Thou shalt not steal" & "Thou shalt not bear false witness" would have prevented even more losses. The regulators and government let us down in that case. The laws were in place. But then, the love of money is the root of all evil.