A Credit to the Financial Times for a rare investigative piece, a well-executed probe into a bungled debt rating by Moody’s Investors Service and the subsequent cover-up by the firm.

According to the FT investigation—words we don’t see strung together often enough—a computer bug led Moody’s to give AAA ratings to something called (stay with us, now) constant-proportion debt obligations that didn’t deserve them, even by the already shaky standards of rating debt derivatives. The worst part, Moody’s knew its ratings were bad and didn’t tell anyone, and the FT has the documents to prove it:

Internal Moody’s documents seen by the FT show that some senior staff within the credit agency knew early in 2007 that products rated the previous year had received top-notch triple A ratings and that, after a computer coding error was corrected, their ratings should have been up to four notches lower.

News of the coding error comes as ratings agencies are under pressure from regulators and governments, who see failings in the rating of complex structured debt as an integral part of the financial crisis. While coding errors do occur there is no record of one being so significant.

The FT’s story made waves immediately. Moody’s promised an investigation and the Securities and Exchange Commission said it would take a look, urged on by politicians.

To add to the journalistic excellence, the salmon sheet tacked on an in-depth look at the background of the ratings firms debacle that is a key factor in the credit crisis and reports more on CPDOs themselves (a side Credit to Money Week for this perceptive and on-the-money article about them way back in 2006).

The package provides the kind of deep, confrontational reporting too often missing in the FT, which is usually content to post 400 words and be done with it. The Moody’s package is especially welcome at a time when The Wall Street Journal, which historically has used (and indeed, been the exemplar of) the American long-form approach much more, may be on its way to becoming FT II, in what Audit honcho Dean Starkman calls “the Anglo-ization of The Wall Street Journal.

If that’s the case, investigative efforts from the FT are especially needed. And even if it’s not, an FT investigative capacity is a welcome addition to the American journalistic landscape and a sign that the British paper intends not just to report but to lead.

Ranieri’s CA record: down the memory hole

A Debit to the financial press for its coverage of Franklin Bank Corporation naming an interim CEO after the company revealed “improper accounting” in its mortgage lending numbers. The company made its chairman Lewis S. Ranieri acting CEO.

It’s interesting news, and The New York Times reported it on its Business Day cover with the angle that Ranieri had been a sort of subprime Cassandra, “warning anyone who would listen that the housing market was about to collapse.”

The Wall Street Journal wrote about it on C2, and gives a bit of background, too, noting that Ranieri was a key figure in the classic Wall Street book “Liar’s Poker” who basically invented the mortgage bonds that led to the current crisis. Reuters mentions that, as well.

But none mentioned a germane piece of data for someone taking over a company in the midst of accounting woes: Ranieri has experience with accounting scandals. He was on the board of Computer Associates when it put itself through its long, crippling ordeal earlier this decade and was nearly shut down by a federal indictment in the $2.2 billion accounting fraud. CFO.com is the only publication we can find that even mentioned his association with CA (in 2006 it renamed itself like most accounting frauds do).

One big shareholder filed suit last fall against CA alleges that Ranieri and former New York Senator Alfonse D’Amato “knew of and directed the cover-up of the fraud” and that Ranieri specifically met with an executive to tell him to lie. The exec is now in prison.

This is all information that readers should know.

Counterintuition runs amok

A Debit to Wired for its burn-the-village-to-save-it cover story on global warming in its June issue.

We know Conde Nast has got to sell magazines and all, and barring pictures of celebrity cellulite, nothing accomplishes that better than the Everything You Thought You Knew Is Wrong piece, but this is ridiculous. We’ve just about had it with this know-it-all journalism of unconventional wisdom.

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.