In the wake of the bursting of the stock market bubble in 2000 and the collapse of Enron Corp., Congress passed the Sarbanes-Oxley Act (SOX). It required corporate managers to attest to the accuracy of their financial statements, toughened accounting rules and increased the authority of the Securities and Exchange Commission to police fraud.

Now, says Rogoff, “We’re going to end up with SOX squared.”

Worse than Japan?

The Financial Times talks to the Japanese finance minister who says the U.S. must pour taxpayer dollars into the markets to solve the financial crisis. He should know.

The FT is also holding on to its scoop, denied elsewhere, that the U.S. and European central banks are discussing buying up mortgage-backed securities to artificially boost that locked-down market.

Here’s the most notable paragraph of the story:

The remarks are the first public expression of concern by a Japanese cabinet minister that the impact of the current financial market turmoil could be much more serious than Japan’s experience during its “lost decade” of abnormally slow economic growth in the 1990s.

The FT doesn’t back this extraordinary claim up with any quotes from the finance minister. “Much more serious” than the Japanese depression of the 1990s?

We’d like more information on that, but all we’re told is that the official said Japan’s woes were limited to the banking sector, while current U.S. problems are more widespread.

Rats, sinking ship, etc.

Here’s a story to watch: the WSJ goes C1 with an exclusive that former Countrywide execs are forming a company to buy up distressed mortgages—not mortgage-backed securities but whole loans.

Essentially these guys would be trying to profit off the collapse of a system they helped weaken.

PennyMac’s plan to profit from the mortgage industry’s turmoil is likely to draw fire, especially from those who believe Countrywide’s aggressive sales tactics and lowered lending standards helped lead to the subprime-mortgage troubles in the first place.

“The whole subprime mortgage fiasco was built on sort of Wall Street’s snake-oil salesmen convincing America this is a can’t-miss scheme,” says Irv Ackelsberg, a consumer lawyer in Philadelphia who testified to the Senate Banking Committee on lending last spring. “It sounds like they’ve just morphed into some new version.”

We don’t know whether to buy this bit of unhappy talk from the execs who have an interest in lowballing the market right now, but it sounds about right:

It thinks whole-loan losses have barely begun to materialize, and a new wave of problems is coming as certain loans with low initial “teaser” rates reset to higher rates, squeezing borrowers’ ability to pay.

Oh, right, the Little Man

The Los Angeles Times has an interesting story on how the Fed’s moves last week to bail out Wall Street were made possible by a 1930’s law created to help out the “little man.”

(Speaker of the House John Nance) Garner may have rolled in his grave at what the Fed did with his largely forgotten bit of populist lawmaking, but most economists applauded.

“It was almost a miracle that it was there, and it was a miracle that someone in the Fed figured out how to use it,” said David M. Jones, a former Fed official who is now chief economist at Investors Security Trust in Fort Myers, Fla.

There’s that much-misused word “populist”, but this is a good story overall.

Fees, fees, and more fees

Also on C1, the WSJ has a good analysis of how the financial sector’s rebound last week may not last. It “faces a business environment unlike anything it has seen in more than a decade.”

“The earnings power of financials has been bruised and the question is, how fast can it come back,” says David Kostin, market strategist at Goldman Sachs Group.

Mr. Kostin rattles off a list of income sources from recent years that, while not necessarily dead, are going to be greatly reduced for some time to come. “You had mortgage origination, mortgage-servicing fees, loan-commitment fees, advisory fees, and then the home-equity fees, consumer fees,” he says.

The paper also notes that firms are highly likely to become more risk averse and take on less debt, which has goosed returns for years.

Yes, and?

The FT fronts a confusing story saying some credit securities have lost a third of their value while others have lost 95 percent. It says the numbers are “the first public price estimates for specific structured credit securities to have emerged since the start of the credit crisis.”

Context, people. Context.

End times

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.