Borrowing to gamble

Freakonomics blog has an interesting piece on how we got into this financial crisis. The oversimplified version is that too many people gambled on credit. As in, they borrowed money to place a bet, and lost the bet. The bet? That housing prices would continue to rise. Highly leveraged? To borrow an analogy, I put up my $1000 gold watch for collateral (i.e., creditor can take it if I default on my loan), the same single gold watch, for, say, 30 loans. After the first creditor takes the watch, what then? I suppose 'hung for $1000, hung for $30,000'.