Bank of America, which agreed to purchase Countrywide a couple of months ago, has got to be loving all of this. Hey, you lie down with dogs…

Countrywide, long the No. 1 mortgage company in the U.S. in terms of dollar value of loan originations, also was considered among the most aggressive in finding ways to make home loans to consumers whose qualifications couldn’t be proved or seemed questionable, mortgage industry executives and analysts said. The Federal Bureau of Investigation has begun looking into its practices in pursuing such business, according to people close to the matter.

Notably, the WSJ doesn’t repeat its scoop from Saturday that the feds are looking at whether Countrywide has basically been cooking its books by not fessing up to its losses.

Here’s what it said then:

Another potential issue facing the company is whether it has been candid in its accounting for losses. People familiar with the matter said that Countrywide’s losses may be several times greater than it has disclosed.

Is the Journal backing off? We’ll be watching this.

A Loss, By Any Other Name

In more bad news for the private-equity boys, Blackstone Group’s profit flopped by 90 percent last quarter and it says it’s outlook isn’t much better for at least the next year.

According to which story/accounting spin you believe, Blackstone either earned $88 million in the fourth quarter, an 89 percent fall from a year ago, or it lost $170 million, including compensation expenses.

The WSJ calls it a loss in its front-page Business & Finance column, but spins it into a profit by the time its story hits C3.

Bloomberg initially reported Blackstone had a loss, but calls it a profit here.

Wall Street analysts base their estimates on what Blackstone calls “economic net income,” which doesn’t conform with generally accepted accounting principles for net income and excludes compensation costs related to the vesting period for executives’ ownership stakes.

Whatever that means.

The New York Times says Blackstone and the “Buyout Industry Staggers Under Weight of Debt.” It reports CEO Stephen Schwarzman has lost $4 billion because of the stock’s plunge since its IPO last summer.

That hasn’t stopped him from coming off some serious cash, though. Schwarzman is going to slap his name all over the hallowed New York Public Library for a fee of $100 million, according to an NYT scoop. The money will go toward a $1 billion library modernization plan.

Lots of potential Quotes of the Day on this one, but we’ll go with this:

“We hope to incise the name of the building in stone in a subtle, discreet way on either side of the main entrance about three feet off the ground,” said Paul LeClerc, president of the library’s board of trustees. “It’s in keeping with the dignity of the building.”

In non-biblioteca private-equity news, Carlyle Capital is begging its lenders to quit selling its holdings to cover margin calls. Wall Street has already sold $5 billion of Carlyle’s $21 billion in assets, the WSJ says on C2.

The Fed As Backstop

The Journal says on A2 that the Federal Reserve, so far stymied in its attempts to stave off a market and economic meltdown, may get creative, perhaps by lending to non-banks or buying Fannie and Freddie bonds itself. Haven’t heard that old government lecture to wiseacre Wall Street-types-who-knew-better that it doesn’t backstop those folks lately.

This paragraph doesn’t make us feel better:

Since 1932, the Fed has had the authority to lend, against collateral, to individuals, partnerships or corporations other than banks in “unusual and exigent circumstances,” subject to the vote of five members of the Board of Governors. (The board has seven seats, but two are currently vacant.) This power has never been used.

On its Money & Investing section the WSJ fronts a scoop that the SEC is investigating whether the mayor of Jefferson County, Alabama—the government in the news for probably being about to go bankrupt after losing derivatives bets on sewer bonds—got bribed by a local bank to give them the bond-underwriting business.

We didn’t think the sewer-bond story could get too interesting, but it may well prove us wrong.

Out The Door

And the Wall Street layoffs begin. Lehman Brothers is laying off 5 percent of its workforce, while a WSJ column says top execs on the Street say as many as one in five jobs in the industry will go the way of the subprime mortgage-backed security.

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.