There was an interesting story in the WSJ today about AK Barnett-Hart, a Harvard undergraduate who wrote a thesis on the economic meltdown. http://online.wsj.com/article/SB20001424052748704588404575124042479755812.html#mod=todays_us_money_and_investing
This thesis served as a major source for Michale Lewis' best selling book "The Big Short; Inside the Doomsday Machine". The inside story is very interesting in that she apparently received scant encouragement from her professors to pursue this project. However, through networking with Harvard Alums and garnering access to the LehmanLive database, she generated an insightful piece judged to be superior to much of the "professional" research. Her thesis can be found online at:
Another interesting piece is a video of Andrew W. Lo, director of the Massachusetts Institute of Technology’s Laboratory for Financial Engineering. He does a great job of explaining the CDO model and the assumptions which led to its undoing.
The lesson from both of these pieces is catastrophe always looks easy to spot once it has already happened. Before the event, it is much more difficult to spot and the ecosystems where catastrophes develop are marked by no shortage of sentinel events which generally precede nothing.