In construction, but summary below is elucidating, I think.

The cause (bubble, excessive borrowing and leverage as is typical of bubbles)
    The Fannie Mae, Freddie Mac problem
     Other contributors or "allowers"
Did the "bailouts" and stimulus make sense?


Quick summary

    Speculative bubble in real estate (and loss of value) - A disaster ready to happen
         Wall Street was not the cause 
         Massive worldwide liquidity seeking a place to invest →  Excessively easy credit
              → Opportunity to borrow alot (which was overdone)  
    Americans were overleveraged (too much debt) - A disaster waiting to happen
    Banks and investment firms were overleveraged


    Bad mortgages
    Companies with too many mortgages, not enough reserves (excessive leverage)
    Derivatives that obfuscated values and buyers who were blind to risk

At the base of the whole collapse: (Scan)

         Speculative buying by the public, and buying beyond their means
         The Sub-Prime Mortgages - Bush and McCain had tried to regulate, but were
             rebuked by Dems
         The assumption that real estate would not go down much (how dumb is that?)
              Therefore, investors (included sophisticated ones) were blind to risk

The Added Volatility

          Some companies had too much invested in sub-primes, without adequate
          Companies were insured with AIG mostly, so companies would go down if AIG
                couldn't pay
          Ratings agency dramatically misrated 

The bad idea:  Loosened lending practices
     The initiator:  Government, Fannie Mae and Freddie Mac
                            Government policies
      Lack of regulation:  Allowed lenders to lend without set minimum limits

Attempts to solidify Fannie Mae and Freddie Mac to prevent disaster:  (if they were regulated it would have prevented or dramatically lessened it)

      Bush administration concerned about systemic risk 2001
      McCain and Bush 2003, rebuffed by Dems
      Greenspan warning 2005, rebuffed by Dems 
      McCain and Bush 2006, rebuffed by Dems   
             Video of Dems denying any problem  & Barney Frank 2005 What Bubble? 
             Some others:  Barney Frank I did not push for homeownership
                                  Nancy Pelosi 2008 "Twists"   
       Article: Fannie Freddie Bailout Could Cost Taxpayers $1 Trillion CNBC & video 


  The set up    Late '90's repeal of the Glass-Steagall act and the blocking of the
                            regulation of derivatives
                      Rating agencies rated sub-prime mortgage bundles as AAA
                           No one thought real estate could go down
                      Speculators in real estate creating a bubble
                      Consumers overleveraging plus some lying and some "cluelessness"
                      Some financial institutions had too much of their own money in them
                           Some had too little reserves.
                      AIG had insured against losses of many companies, so its demise would
                          cause other companies' demise.
                      Many lenders took low initial payment in adjusted rate mortgages
                      Global cash abundance looking for higher interest rates
                      Overspending by consumers


They were absolutely necessary and without them we would have had a much higher unemployment rate and a much higher destruction of assets. 

The Republicans argue, I think falsely, that there was no real benefit and then they hold the TARP was unnecessary and that the Stimulus package was ineffective because unemployment did not go down to the promised 8%.  But it would have taken a miracle to drop that far, though the stimulus caused us to put the brakes on the fall of employement and to restore a little confidence instead of a larger panic.  The two, together, were of enormous benefit and prevented a much larger collapse. 

The huge stimulus that is included in the Great Tax Compromise of 2010, at the end of the year, was extremely smart and should be very beneficial.  Obama got more than enough out of the deal, including hugely stimulating additional tax reductions beyond keeping the "Bush tax cut" rates. 

TARP is much maligned.  Invented by the Bush administration and approved by Obama the candidate, TARP was absolutely necessary to "bailout" the financial system from collapse of the institutions that provided the financial foundation that permits our economy to run.  It was a bailout for Americans, not for the financial institutions - we just had to deal with them as the intermediary.  And it essentially not only saved the system but also provided an initial boost to save the automakers - and it has just about all been paid back. 

The Stimulus, however necessary it was, has not had as clear a payback - but I think the payback was the avoidance of a much larger decline.