Don't blame the tools, just blame the fools.

On July 11, 1986:  Fannie Mae (the Federal National Mortgage Association) offers the first issue of stripped mortgage-backed securities through Goldman, Sachs & Co. Now bond buyers can buy either interest-only or principal-only bonds, enabling them to bet aggressively on the direction of interest rates. Now institutional bond investors can buy either interest-only or principal-only bonds, enabling them to bet aggressively on the direction of interest rates -- and homeowners can, much more readily, refinance their mortgages as interest rates fall. Two decades later : 20 years of increasing innovation and lax risk management on the part of industry and governments ended in the Financial Crisis of 2007-2008. Just a reminder that financial instruments are tools and it is up to the practitioner to use them properly.