How taxpayers are paying for the bailout

I replied to a forum elsewhere, but I figured I'd copy here, since it's an easy-to-follow summary of how taxpayers will foot the bill for all the irresponsible speculation and billions of bonuses paid to IB executives.

I believe the money trail in general goes something like this:
- Bank gives liar loan for 100% value in 2006 for max bubble value of home, securitizes the loan, sells to investors as part of a package
- Investors, who are not all idiots (contrary to current popular belief) buy what amounts to an insurance policy against losses of this very risky loans in the form of counter-party default swap agreements from investment banks (eg: Bear Sterns)
- Investment Banks buy and sel these obligations, accumulate large potential obligations, and value them relative to estimated chance of loss (which is low during the bubble)
- Bubble pops
- Investment Banks get some margin calls, forced to call in other insurance policies, triggers systemic margin call (great phrase, btw)
- Particular IB's realize they have more obligations than capital, and can't raise more capital because of their huge potential exposure (which is much more obvious post-pop), go to Fed
- Fed agrees to give them money to pay off their obligations to prevent everyone going bankrupt at once, even though they know they will take near 100% losses since their taking used toilet paper as "collateral"
- Treasury states that they will cover Fed's losses (although they are not legally allowed to do so without Congressional approval, but they will do it anyway), print money to cover losses
- Taxpayers pay for it

How's that for the money trail, in a easy-to-follow form?