I am the money manger in our household, we have some stock, have a 401K, yadda, yadda, but I personally don't quite understand everything that is going on with the current financial crisis, so I decided to find some answers online.
By far, the most popular and acclaimed explanation of what has happened to our economy seems to be the story, "Giant Pool of Money", aired on NPR's This American Life. I just finished listening to this online and things do make more sense to me.
There's another great link here: 5 Easy Pieces.
Basically, banks and lenders gave people money without having to verify salary/income because they were convinced the housing market would continue to grow and their money would always be safe. Stupid move.