Steven Pearlstein says the Federal Reserve still hasn’t learned its lesson about credit bubbles. Pearlstein adds to the growing chorus saying the Fed’s policies have created a secondary bubble.

The Big Money has a piece looking at why the credit-ratings agencies haven’t been held to account for their essential role in creating the crisis. One reason: A 2006 law passed by Congress specifically forbade the SEC from prosecuting them for defrauding investors.

— Speaking of the credit raters, the WSJ’s Heard on the Street reports that Standard & Poor’s now says the big banks, including Citigroup, Morgan Stanley, Bank of America, and Goldman Sachs, would be rated several notches below their current levels without the explicit government support they have. The Journal calls this “a small, but potentially important, dent in the wall of moral hazard that protects the banks.”

— And speaking of Goldman Sachs (an Audit funder), what was it doing taking money from a junior part of a CDO and paying off a senior part (senior creditors are supposed get paid before junior creditors get anything)? The FT’s Alphaville rounds up some reaction today after Bloomberg reported this last week.

Goldman’s two Abacus deals may have had “sole discretion” built into the deal documentation — but it seems that many in the industry were caught unaware. Given that CDO documents can run into the thousands of pages, we wonder whether senior Abacus noteholders would have noticed the clause.

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.