One point I think was not made forcefully enough if at all is how unaware all the Wall Street firms (including supposedly supernaturally aware Goldman) were of their dire predicament. Cognitive impairment of the highest order.

As always, one of the best analyses out there comes from those "crazy liberals" over at the New Yorker (best weekly mag bar none in my opinion). James Surowiecki notes that "Considering that Wall Street firms spend all day dealing with the market, they have been slow to understand just how vulnerable they were to it. Companies like Lehman and, earlier, Bear Stearns saw going public as an excuse to take on more risk and act more recklessly, when in fact becoming a public company makes caution more important, since the margin for error is smaller, and the punishment for failure swifter."

I remember fairly well the whole debate in the late 90s about Goldman going public. Resistance from the older partners and particularly the retired ones was fierce and while most of it might have had some not so noble motives (fear of change, fear of losing control and influence, etc...), some of it was spurred by the old timers' well-founded fear that just what happened the past few months would happen.