Back to digression-
"Because of the way they were packaged, .... It was not possible for investors to know what they were getting?"
The investors were AIG, Bear Stearns, banks in Scotland, etc.
These were the big bundles, gathered up as the bigger firms bought and repackaged, but they started with local loans from banks such as "Bank of Lolita" Left Branch Savings & Loan to Joe Blow wand on up.
Of course, the individual mortgages were not identified except by name and number of instrument, but certainly the banks and investment firms at the top should have known that they were riding a bubble that was approaching the critical stage.

Old history now, the banks and investment firms are stabilized and making money again. The federal government is getting its money back with interest.
Let's hope that some controls are put in place since it is doubtful that firms such as Bear Stearns had more than a cupful of brains among their many thousands of staff.
So far, the bailout is the greatest accomplishment of the Obama administration.



(I apologise to Bank of Lolita, which is a real bank in the old gold mining country of California. I just like the name).