Like the title says, this is a report from the Congressional Research Service about the financial meltdown titled Government Interventions in Response to Financial Turmoil
I haven't read it yet but thought that Ponycar and a few others would like to check it out.
In August 2007, asset-backed securities, particularly those backed by subprime mortgages,
suddenly became illiquid and fell sharply in value as an unprecedented housing boom turned to a
housing bust. Financial firms eventually wrote down these losses, depleting their capital.
Uncertainty about future losses on illiquid and complex assets led to some firms having reduced
access to private liquidity, with the loss in liquidity being fatal in some cases. In September 2008,
the financial crisis reached panic proportions, with some large financial firms failing or having
the government step in to prevent their failure
For the rest of the report, click this. http://www.fas.org/sgp/crs/misc/R41073.pdf