Lots of material out there to read to understand what is going on. Here are some of the more interesting ones I’ve found:

The Money Meltdown – a set of links that attempts to summarize the situation and how we got here.

Slate.com: Subprime Suspects: Puts to rest the idea that poor homeowners are somehow to blame for this.

60 Minutes: A Look At Wall Street’s Shadow Market

Megan McArdle: How did it all happen? – some cognitive science behind this.

Forbes: The Economics of Trust – Capitalism requires trust. Break the foundations of trust between people and institutions and something like this is inevitable.

And the best two explanations I have heard so far were on This American Life: The Giant Pool of Money and Another Frightening Show About the Economy