I really hate when news organizations drop big stories over the holidays. For one, they have far less chance of making an impact when people are traveling and/or headfirst in the eggnog (for another: CJR shuts down for a glorious week and a half then).

Last year, it was The New York Times dropping a big Goldman story on Christmas Eve.

This go-round it’s ProPublica dropping a standout piece on the 22nd. Word for the press: Get this stuff out a week before Christmas or hold these pieces for the new year.

Jake Bernstein and Jesse Eisinger are the duo who dropped the Magnetar blockbuster in April. Ever since, they’ve been pounding the story of how Wall Street intentionally kept the bubble game going long after the market originally started to decline by creating false demand.

Remember, Magnetar almost singlehandedly kept the toxic CDO game going in 2006 by buying up the most-toxic equity slices so the securities would still get created and it could bet against them.

Last month’s report, ProPublica reports that Merrill Lynch executives did something similar to keep the gravy train on the rails. Here’s the lede:

Two years before the financial crisis hit, Merrill Lynch confronted a serious problem. No one, not even the bank’s own traders, wanted to buy the supposedly safe portions of the mortgage-backed securities Merrill was creating.

Bank executives came up with a fix that had short-term benefits and long-term consequences. They formed a new group within Merrill, which took on the bank’s money-losing securities. But how to get the group to accept deals that were otherwise unprofitable? They paid them. The division creating the securities passed portions of their bonuses to the new group, according to two former Merrill executives with detailed knowledge of the arrangement.

To put this another way. Merrill Lynch’s CDO group was making tons of money churning out these crap securities. In 2006, the market wised up and outside investors started fleeing these securities. These products were so awful that Merrill couldn’t even get its own colleagues to buy them. So Merrill execs paid them millions of dollars to take them on against their better judgment.

This report adds another piece of evidence that these people knew they were destroying their own company for their short-term benefit. ProPublica refers to an April 2008 Wall Street Journal story that reported that traders had resisted buying the Merrill CDOs. Here’s what it said:

Still, executives believed that so long as all they retained on their books were super-senior tranches, they would be shielded from falls in the prices of mortgage securities. And they wouldn’t have to sell off their mortgage bonds at a loss.

Now we know the CDO group was paying traders internally to take on super-senior assets that they thought weren’t worth a damn.

Here’s ProPublica on how the scheme was viewed internally:

Within Merrill Lynch, some traders called it a “million for a billion” — meaning a million dollars in bonus money for every billion taken on in Merrill mortgage securities. Others referred to it as “the subsidy.” One former executive called it bribery. The group was being compensated for how much it took, not whether it made money.

The group, created in 2006, accepted tens of billions of dollars of Merrill’s Triple A-rated mortgage-backed assets, with disastrous results. The value of the securities fell to pennies on the dollar and helped to sink the iconic firm. Merrill was sold to Bank of America, which was in turn bailed out by taxpayers.

Here’s how the rest of us have paid:

By creating more CDOs, banks prolonged the boom. Ultimately the global banking system was saddled with hundreds of billions of dollars worth of toxic assets, triggering the 2008 implosion and throwing millions of people out of work and sending the global economy into a tailspin from which it has not yet recovered.

And naturally:

What became of the bankers who created this arrangement and the traders who took the now-toxic assets? They walked away with millions. Some still hold senior positions at prominent financial firms.

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.