Audit Roundup: Wall Street Gives Way

Wall Street's rot; Where are the accounting cops?

Fortune takes a look at how Wall Street rotted from the inside until it gave way, while the FT’s John Gapper gives the history how its model arose.

The Journal says the Wall Street business model is being replaced by old-timey, less risky banking—the “business of chasing customer deposits and building branch networks.”

Speaking of the Journal, it seems like of all the times in its 119-year history, this year was the worst to de-emphasize business news (excepting 1929-30, of course). Rupert Murdoch and editor Robert Thomson have give the front page over to non-business news to an unprecedented extent. The entire front section reads more like the Washington Post than the Journal of even a year ago.

Also on the WSJ bad-timing tip: Launching a luxury magazine while Wall Street goes down the toilet. But, hey, I like the ’s new Web site.

Bloomberg’s Jonathan Weil is on fire about the coppers not going after Lehman Brothers, Fannie Mae, Freddie Mac, and others for their shady accounting. This all while short sellers have been vilified by authorities despite being right.

Never has it been more evident that the SEC and other government agencies think their job is to protect financial companies and financial executives, rather than the investors they rip off.

Read the whole thing and pass it along to your friends.

This is a month old, but economist Nouriel Roubini has been the most prescient prognosticator of the crisis, going back years. Not for nothing did the Times Magazine call him “Dr. Doom”. Here he is in July predicting the demise of all the Wall Street Five.

ABC News recalls that the NYT and it eight year ago reported that Lehman Brothers was bundling mortgages from predatory lender First Alliance into the very junk that ultimately caused the avalanche that snowed it under. That reminds me of this good 2007 WSJ piece on Lehman and First Alliance—“How Wall Street Stoked the Mortgage Meltdown”—by Michael Hudson, who has done great work on the topic.

Joe Nocera at the NYT and Barry Ritholtz at The Big Picture gets it right about Merrill Lynch’s John Thain, who saved his company and got out with pretty good terms all things considered —unlike Lehman’s Dick Fuld.

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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 Follow him on Twitter at @ryanchittum.