sck5,
Please take time to read this article from
The Atlantic as it's probably the best over view of the current mess I've seen to date. And it explains why it can, and will, happen all over again some time in the future. It's a fairly long article but it does go a long way towards explaining how almost everyone acted rationally and yet this still happened. Ironic that I found it shortly after your last post.
Why Wall Street Always Blows It - The Atlantic (December 2008)