MP: It kinda bums you out, because you want to do things that have big (impact) because that’s why you’re in the business. And public policy would work a lot better if they actually understood what the hell was going on.

TA: Like adding up the total number of trillions that the government is on the hook for in this bailout. Nobody else is doing that but you. Why not?

MP: Because it’s a big pain. You start off with whatever you can remember off the top of your head—oh, they’re doing this, they’re doing that—you start writing it down on a piece of paper and you go “Wow, this is real money.” It starts adding up.

The thing that people don’t realize is that the Fed is now the “bad bank.” That’s just something that people don’t understand. They’ve taken collateral, and they refuse to tell us how they valued it…

We have numerous banks— dozens, maybe hundreds that are insolvent. And they become more insolvent every day because more people quit paying their mortgage loans, and more guys move out of the shopping center, and more people quit paying their credit cards. But nobody wants to have the adult conversation…We need to be honest about what the problem is here, how big it is, and how we’re going forward to clean it up, and who’s going to pay for it.

TA: Basically the charade that’s going on here is that they haven’t marked these assets down yet because that would show they’re insolvent.

MP: But a lot of [the assets] have gone to the Fed, though, as collateral for loans. They’re still on their balance sheet, but you borrowed against them. We don’t know if those are cracked CDO’s or prime RMBS…

TA: That’s what you guys are suing (the Federal Reserve) for—to find out what the collateral is.

MP: Yeah, and that’s the secret part of the story that nobody wants to let you know.

TA: Because it’s worth pennies on the dollar or dimes on the dollar.

MP: Yeah, and then everybody’s going to go “Oh my God, we’re lending ninety cents on something that’s worth twenty or thirty?”

TA: They say they don’t want to disclose it because it would interfere with the markets, is that right?

MP: Their basic argument is this would cause chaos, and they’re probably right. But that doesn’t mean that the American taxpayer ought to be on the hook for this.

TA: Why would it cause chaos?

MP: Because people would realize that we’re lending eighty cents on the dollar for something that’s worth twenty cents.

TA: So political chaos?

MP: And maybe market chaos, too. Well, you know the market’s probably pretty savvy about this thing, and everybody knows what’s going on but we just haven’t communicated with the public. When you say “political chaos” you might well be right. That may be what it was. Congress is going to go “We’re lending this much money on this Triple-C security? What are we thinking here?”

TA: One thing I really like about you guys is in your reporting and writing, you have a sense of outrage that’s not in the Journal, say. This thing is so huge, and you guys are conveying the magnitude of it better than some, and there’s a sense of urgency that’s lacking elsewhere. Is this a conscious thing in the newsroom?

MP: We have been primary movers for transparency in markets since our existence. Bloomberg’s reason for being was to give the buy side enough tools so they wouldn’t get screwed by the investment banks. That’s what we’re about. So we’re a weapon for the buy side and a de facto weapon for every one who has a mutual fund. We just need to level the playing field and let everybody know what’s going on. This is from Matt Winkler on down. This is what we do.

It’s also that we realize this is a defining moment for business journalism and for Wall Street. I think that this organization, this news department, was built for this crisis. We’ve got more tools than anybody, we’ve got the will, we have the assets to go after this in a huge way. Everybody believes that in this room.

Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.