There used to be a blog called The Geronimo Manifesto, and he wrote a great post describing the method Wall St uses to profit from the destruction of Main St. It is very applicable to what's happening now.

Small excerpt follows.

Link to post in the Way Back machine:

http://geronimomanifesto.blogspot.com/2008/09/credit-default-swaps-insane-problem-and.html

Excerpt:

"We can now change another assumption. Assume the playing with matches problem is removed and a new problem is substituted. A problem like the husband and wife both having low-paying jobs and no health insurance, coupled with knowledge that many employers refuse to accept illness as a legitimate reason for missing work and have iron-clad policies that require ill workers be fired for failing to report to work.

Or assume both husband and wife have no seniority and work at jobs that may not exist tomorrow because they were shipped overseas last night.

If I knew one or both of them were developing health problems or that one or both were at risk of being laid off, I would see a reasonably good shot at "winning the disaster lottery" so to speak, by buying mortgage default insurance, also known as a credit default swap, on their $400,000 house.

Then I could sit back, relax and wait for the hoped-for and expected misfortune, which will be my good fortune. As could 99 of my gambling buddies."