so how the hell did we get here?

So I've been trying to wrap myself around this financial mess and more specifically trying to gather how the hell we got here.
It really came full circle when you try to take this thing from the root-cause to the large effect and then back to the personal effect this whole finanical mess has created for this country and this world.

Basically some 27 year old stripper making $28,000 in Missouri gets a $500,000 home loan which as soon as she hits 30 can't afford anymore cause her saggy boobs aren't bringing any of the boys to the yard. She can't make her mortgage payment, goes into foreclosure and this happens with every stripper, supermarket checkout girl, call girl and diamond salesman and before you know it the entire banking society goes to shit. In about 6 months some ungodly amount of money (lets call it like 8 trillion dollars of money on paper) just disappears from people's portfolio's as the DOW drops from 14,000 to 7500. In the blink of an eye my retirement savings is in the shitter, my company is having layoffs and salary decreases and my house is worth less than what I paid for it cause of a couple of strippers with saggy boobs.

Somehow we were all fooled cause as the DOW grew, all of our assets grew but did they really grow?
the weird thing is that this wasn't real money anyway, there wasn't a big bank robbery on Wall Street where some dude in a mask just ran away with all the money (Bernie Madoff might be the exception here) but nobody took this $8 trillion dollars, it just got wiped out. It was like we all paid into some big pot with money we didn't have and the money we didn't have became more money we didn't have and then one day the magician pulls back the curtain to reveal there was no pot and there was no money.. But the stripper in St. Louis got her house because she thought she had this money and the banks gave her the loan because they figured that some other stripper would come around and buy the first one's house for twice the price. Then they told everybody that this was a sure thing and sold it to the rest of the world as a AAA bond. So we were basing our entire livelihood that this imaginary money would continue to grow at the same rate of inflation that our housing market was growing.. which is great expect for the magician day and now I go to FlashDancers and the chicks are old, the peanuts are stale and the lighting is off.

but somehow the lap dances are still $20.