The Wall Street Journal has a long page-one look at Deutsche Bank and how it played both sides of the subprime game. It’s good, but it could have been better.

Here’s how the WSJ describes what Deutsche did:

The bank, however, continued to build its mortgage-securities machine. It was a reliable assembly line, beginning with lenders like NovaStar, based in Kansas City, Mo. Deutsche agreed to provide a credit line to NovaStar in 2003, the year the home lender touted its “credit score override program.” A co-founder of the lender says that it sought “to underwrite loans with a focus on ensuring the borrower could repay his or her debt.”

As U.S. lenders churned out home loans, Deutsche bundled them into mortgage-backed bonds. It assembled these into CDOs, and built other CDOs out of derivatives that served as insurance on the bonds. Deutsche marketed the deals to conservative investors, such as insurers and banks, that had a positive view of the housing market.

Meanwhile, for hedge funds or other investors that wanted to bet on a housing downturn, Deutsche in 2005 and 2006 created a half-dozen deals that were collectively known as START.

Note that it’s the dumb money (banks and insurers) that gets the bum advice here and the smart money (hedge funds) that gets the good advice.

And there’s the nut of the problem. Deutsche began creating investments so they could be shorted. Now there’s nothing wrong with that per se. But when you’ve got one arm pitching shorts to certain investors while you’re hawking the other side of the same bet to other, less select buyers, you’ve got a potential problem. When you’re creating these shorts so you yourself can bet on them (despite Deutsche’s denials in the quote below) while selling the longs to the dumb money, you’ve got a potentially big problem. The ultimate question here is how the long bets were marketed.

Unfortunately, the Journal doesn’t have the knockout blow, which would be the marketing materials Deutsche used to pitch junk CDOs to the dumb money. Here’s as close as it gets (emphasis mine):

Deutsche took the bearish side of these deals and sought to sell the bullish side of them to U.S. and European investors. The bank says the instruments weren’t designed to enable it to short housing.

Not all investors who were pitched the bullish side were impressed. “My quick analysis of the portfolio suggests this is the biggest crock of s— I’ve seen yet!” one London trader who got the pitch responded by email to Deutsche. He added, “I won’t be spending any more time on it, but wish you luck in moving some paper.”

And:

During this time, Deutsche continued trying to get other investors to go “long” the housing market—that is, it continued trying to sell them products likely to prosper if housing did.

M&T, the bank that agreed during this time to invest in a new Deutsche mortgage deal, alleges in its suit that a week before the purchase, a Deutsche salesman told it by phone that the “underlying structures in these bonds are built to withstand” adverse conditions.

In late 2007, M&T wrote down the value of its $82 million investment to just $1.9 million, according to its suit.

Deutsche said documents for the product had clearly warned that the assets in the pool were of poor quality.

Deutsche says that, but did they really? We shouldn’t swallow Deutsche’s PR line, so it would have been nice for the Journal to give us an idea there of how true that is.

And I have to think that while it’s great that the Journal and others are zeroing in on the investor end of things, they’re still not really getting the better story: What Wall Street knew about the predatory lending it was bankrolling.

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.