Subprime Scandal Investigations – A Faulty Inquiry? (GS, JPM, FNM, FRE)

The Financial Crisis Inquiry Commission has kicked off its long-awaited hearings by promising a "thorough examination of the root causes" of the subprime scandal.

Wall Street honchos from Goldman Sachs Group Inc. (NYSE: GS) and JPMorgan Chase & Co. (NYSE: JPM) landed in the pillories first, instead of Washington executives from Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE), who have far more to answer for than Goldman Sachs Group Inc. and JPMorgan Chase & Co.

Under pressure from Washington, the congressionally chartered and subsidized agencies gobbled up more than $1 trillion of the subprime and other toxic home loans that nearly KO'd the financial system. Barney Frank (D-MASS), the head of the House banking panel, protected Fannie Mae and Freddie Mac from oversight as it took on more and more bad loans in the name of Frank's hobbyhorse, "affordable lending."