But more to the point, the metaphor had no basis whatsoever in the orthodox theory of finance, such as it existed in 2008. In that theory, efficient markets are arbitrage-free, and any contingent claim can be reduced to any other contingent claim through some stochastic wizardry (chapter 5 goes into some greater detail on these issues). Hence risk itself can always be commodified and traded away—that is the service the financial sector performs for the rest of the economy. That’s just Intro Finance 101, from CAPM to Black-Scholes. In academic doctrine, the system as a whole simply cannot fail to price and allocate risks; hence there is no such thing as virulently “toxic” assets. Crappy assets, junk bonds, dogs with fleas, yes; but inherently “toxic,” never.

Philip Mirowski, Never Let a Serious Crisis …, loc. 467