I wish the Lehrer News Hour had posted the video of this, but instead it's only the audio track. But nonetheless, it's another good down-to-earth explanation of how the relatively small amount of defaults ($100-200 billion) has lead to a much larger crisis of confidence in the US capital markets. If you're still saying to yourself, "I don't get how this is happening," go ahead and spend seven minutes listening to the clip.
On this page I've tried to collect links to help explain this crisis. As before, the search for higher yields and the absence of any (personal) downside for the fund managers drove a series of very risky moves that left the entire system over-leveraged and exposed.