Where does all the money go?

I have had several conversations with folks about the economic turmoil. As I said during a presentation I gave last week at the Society of Plastics Engineers Annual Blowmolding Conference, "Just because I'm majoring in economics does not mean that I understand the financial crisis."
In fact, I think that most people don't understand the financial crisis (that's part of the problem), and I am not a financial economist, nor do I ever intend to be. I tell people what I follow myself: Watch your own finances; don't get too bogged down by what is going on in the world markets because it will just depress you; watch your own personal debt load and ask yourself, "Do I really need to spend money on this?" when you're about to make a purchase, especially on bigger-ticket items.
The financial crisis is the "bust" of the housing market frenzy. That's how I see it anyway. During the frenzy, I kept saying to myself, "This isn't sustainable." At that point, I only had anecdotal evidence, so my theory wasn't fully supported by solid numbers.
Now, I did suspend my monthly contribution to a mutual fund that I have and I transferred more than 50 percent of its total value into an existing savings account for now. The market is too risky, and I have had that fund for years. Every month, religiously, I put in dollars and I don't want to lose that.
I have a profound respect for the complexity of financial markets, and I can tell you that all that money didn't just disappear. It went somewhere. A producer from MSNBC did an OK job of explaining it.
http://www.msnbc.msn.com/id/27122758