There is not one culprit

The President's Working Group on Financial Markets is part of the Treasury but has representatives from the Fed, SEC and CFTC. In its latest update it concludes that there is more than enough blame to go around. Here are what they assert as the major reasons for the current disaster:

• a breakdown in underwriting standards for subprime mortgages;

• a significant erosion of market discipline by those involved in the securitization
process, including originators, underwriters, credit rating agencies, and global
investors, related in part to failures to provide or obtain adequate risk disclosures;

• flaws in credit rating agencies’ assessments of subprime residential mortgage-backed securities (RMBS) and other complex structured credit products, especially collateralized debt obligations (CDOs) that held RMBS and other asset-backed securities (CDOs of ABS);

• risk management weaknesses at some large U.S. and European financial institutions; and

• regulatory policies, including capital and disclosure requirements, that failed to
mitigate risk management weaknesses.

In summary, it's greed and people not doing their jobs.