And some of the banks, or at least some of their leaders, were hardly short-sighted. Didn't you read about all those credit swaps? A credit swap is when you purchase insurance on a group of loans. If the loans go bad, you get the value of the insurance, if they don't, you lose what you paid for the policy. It's basically like placing a bet. Some smart investors said, "Hmmm...the government is forcing banks to make bad loans. You know what? Let's place a bet that all these bad loans will go bad, and make money hand over fist! If the government wants to be stupid, let's at least profit from it." So they did. The sharpest ones placed their bets about two years before the collapse, when they started noticing these blocks of bad loans. Then about a year or so before the collapse, credit swaps came pouring in as others began to catch on. Haven't you heard some of these interviews with these now very rich investors? They were very aware of government policies and accurately predicted the results.
Two years...nothing helps patience more than a sure thing.