There is an article in the New York Times on the fall of Citibank that has some startling admissions, but none more shocking than this:

Citigroup's risk models never accounted for the possibility of a national housing downturn, this person said, and the prospect that millions of homeowners could default on their mortgages. Such a downturn did come, of course, with disastrous consequences for Citigroup and its rivals on Wall Street.

They never factored that...