What's truly wrong with our financial system?

The last paragraph in an article titled How to play chicken and lose from The Economist Jan 24th '09 is perhaps one of the best explanations of why our financial system is in the mess it is.

"Over the past 35 years it has seemed as if everyone in finance has wanted to be someone else. Hedge funds and private equity wanted to be as cool as a dotcom. Goldman Sachs wanted to be as smart as a hedge fund. The other investment banks wanted to be as profitable as Goldman Sachs. America's retail banks wanted to be as cutting edge as investment banks. And European banks wanted to be as aggressive as American banks. They all ended up wishing they could be back precisely where they started."

"...there's no place like home."