Uh Oh

Don't ask; don't tell. The big guys knew all along these loans were crap, but there was just too damned much money to be made. NYTimes (01.27.08):

"A company that analyzed the quality of thousands of home loans for investment banks has agreed to provide evidence to New York state prosecutors that the banks had detailed information about the risks posed by ill-fated subprime mortgages.

Investigators are looking at whether that information, which could have prevented the collapse of securities backed by those loans, was deliberately withheld from investors.

Loan Reviewer Aiding Inquiry Into Big Banks

"Clayton Holdings, a company based in Connecticut that vetted home loans for many investment banks, has agreed to provide important documents and the testimony of its officials to the New York attorney general, Andrew M. Cuomo, in exchange for immunity from civil and criminal prosecution in the state."

We make money the old-fashioned way: we screw the investors! If that ain't earning it, we don't know what is.