What does 'shorting the banks' mean?

According to the text, "shorting the bank" refers to lending in an area, such as the housing market, all while expecting the borrowers to default on their loans. This, in turn, reduces the value of the product. So, if I am reading it correctly, this is a very risky gamble because you risk being wrong. It is a very profitable venture, however, if you're right and you actually get to buy the product at a hugely discounted rate. Note.... I am no expert here.