Duh. The truth is that the only reason they did this and ignored the obvious was greed:

Former Bear Stearns Chief Executive Officer James Cayne said Wednesday that his firm’s risk level was too high in the year before it collapsed.

"That was the business," Mr. Cayne told a hearing held by the Financial Crisis Inquiry Commission, a congressional panel scrutinizing the financial crisis. "That was really industry practice. In retrospect, in hindsight, I would say leverage was too high."

   It wasn’t just industry "practice". It was a willingness by the Federal Reserve Board and political leaders (who were pocketing huge amounts of legalized corrupting cash from the industry) to let this stuff happen.