WIRED has just published a very nice article, about the mechanism that causes the current financial crisis. It is also available through this link.
If readers find the financial concept boring, see if you like the following version better.
Financial model is kind of like digital visuals, in producing meaning from the underlying landscape for us to interpret. Within the process of interpretation, each individual make 'sense' through our lens of history and cultural (economic) stance. In visual media, our interpretation is all personal as everyone sees thing differently. I think it is also applied in financial modelling. There aren't necessarily a 'correct' view, only collective stance.
As we have witnessed, the collective view doesn't represent the "true" picture. In the case of financial world, it is the massive default of mortgage pool. Collective view merely represents a group of think-alike (not necessary believers) in describing their understanding of picture, with degree of comfort and probability-reasoning (a.k.a. correlation).
What's next. They want power control over the rest of community (of how picture should be viewed and interpreted), and they want to make money out of it. So they starts formalising their interpretation into de facto standard, kind of like the proprietary format for digital visuals. By now readers should be able to tell what's followed (read more).
As for the rest of the community, some have joined the proprietary club and others (mostly the poor and the realist) don't. But ultimately none of us is intact after the fall, as everyone is connected to the digital world.