The Big Takeover by Matt Taibbi.

It starts with an angry and rather vague intro, but then it breaks down all of this stuff more clearly than anything else I've read. The housing bubble; credit-default swaps; collateralized debt obligations; TALF, TARP, and Maiden Lanes I, II, and III; Paulson and Geithner; the Federal Reserve -- all of it is outlined and explained.

Please read.

UPDATE: Let me add that if you're sick of this topic, and don't want to think (or try to think) about it anymore, this is the piece for you. Its explanations are straightforward and will answer many questions, so you can put the topic to rest.

Also, Taibbi is not always "serious" and may be disliked by some, but after the intro of the article, he focuses on doing everyone the service of explaining what needs to be explained.

UPDATE II: Don't mistake the AIG bonus brouhaha for a media-generated distraction. Lots of the anger is misdirected, but fundamentally, this issue is inseparable from all of the key problems, so the bonuses are an appropriate lightning rod for justified rage. The particular division getting the bonuses is truly ground zero of the whole meltdown. And the bonuses were allowed because of the blinkered and slavish approach to the Wall Street monster/zombie/corpse/idol taken by Obama and his experts Lawrence Summers (Frankenstein) and Timothy Geithner (Igor).

UPDATE III: In the Times, AIG execs bemoan the "invasion of privacy" posed by the fact that their neighbors hate them and confront them regularly in their driveways. The anger is said to hurt their children. Perhaps they should have thought about whether having a family is a good idea if one's job is thievery and bloodsucking.

"One A.I.G. executive, who spoke on the condition of anonymity because he feared the consequences of identifying himself, said many workers felt demonized and betrayed. 'It is as bad if not worse than McCarthyism,' he said. Everyone has sacrificed the employees of A.I.G.’s financial products division, he said, 'for their own political agenda.'"

Ah, "politics" -- the dangerous adolescent desire to prevent theft, to punish wrongdoing, and to spit out shit when it's shoved down your throat.