Robert Pozen's Too Big to Save: How to Fix the U.S. Financial System is the single best source for figuring out what happened. It is the go-to book if you are a non-specialist and want to understand: how credit default swaps work, the significance of Basel II, mark-to-market, how the various Fed bailouts operated, the meaning of the toxic asset plans, and many other matters.
Cowen is an economics professor, author, blogger, and if press accounts are true, maintains a seemingly inhuman reading regimen. I think he gives up on more books than most people read in a year. This type of high praise from him should be taken seriously.