Why the global economy collapsed?

An article I read on WIRED (mar'09) by Felix Salomon is raising discussions on blog's and newsgroup's, the title is The Recipie For Disaster, the focus is the hidden reason behind the financial disaster that collapsed the global economy.

The article shows a formula, known as Gaussian copula function, published by David.X Li in 2000, see paper here and exploited by investors and rating agencies to assses financial risks.

The article explains why the formula became very appealing in the financial world to create and reat new financial devices. It recently turn out to be flawed and with it all financial market.

The article is not blaming the inventor the wide use done by the financial world, for managers and quants, it was a great simplifications, but nobody searched for its pitfails before it disrupted the world economy.

In the following paper in WIRED (mar'09), The Reading for Recovery, a manifesto advocates more transparency of data to be shared, which will allow people to cruch them and evaluate them to create a self-regulating financial system.