For a truly great read on the Wall Street collapse, I strongly recommend you read The End by Michael Lewis. He is the author of the book "Liar's Poker". In this article, he clearly explains some of the egregious acts Wall Street perpetrated to get us where we are today. Lewis, like many of my friends, was part of the Wall Street machine. He ended up leaving after he could not stand the ridiculousness of it all.
In the article, he gives a great description of how we got into this mess. He tells the story of people who recognized the now seemingly obvious conclusion that there was no way that people who were getting mortgages should get mortgages. He goes further to explain how the CDO market worked and how the people part of it knowingly exacerbated the situation. To make matters worse, most of these so called "experts" really no experts at all. They were like him, fresh out of school with no idea what they were doing, yet tasked with allocating the nations capital. And these are the people our government wants to bail out now?
Reminds me why I will never hire a consulting company to do work for me. Straight out of college, I went to work for the world's largest consulting company. I did not even know what consulting really was, but it was one of the things everyone coming out of an Ivy League school did. You either worked on Wall Street or you were a consultant. Now, I was a technology consultant. That meant I was supposed to be some sort of expert on technology matters. Now, lucky for them, I had a computer science background. I actually was a pretty good programmer. But some of my colleagues would not be able to tell you the difference between an array and a linked list. They thought "C" was just another letter and "Java" was just something you drank.
Yet we were all shipped out to work on projects at well over $120 an hour. That is not a typo. Now, someone like me, I might be worth it. I was a good programmer, understood the fundamentals, and had the logical mind to solve most computer problems. But some of these other guys? We are talking people who never compiled a single line of code in their life now being asked to build some of the world's larger computer systems. How is that at all sane?
The same thing happened to my friends in Wall Street. All of them were thrown into big money projects. Many of them had never taken a single economics, accounting, or business class. It totally changed the way I thought about the professional world and made me scared about some of the things that happen at these large important companies.