Essentially, this money machine used extreme diversity and interlinking of transactions plus the insurance (credit default swaps) to give the appearance of reducing risk such that there could be a AAA rating.

FORBES: Hang it up, Wall Street. Dodd-Frank is here to stay

This is very much the way certain kinds of machine intelligence systems work (including ExpertMaker which I have covered) where representative examples are used to model much larger populations.

FORBES: Will Facebook Use Lookalikes To Remake Your News Feed Today?