Late last year, I looked at the link between the foreclosures, the housing market and fraud and the the corrupt system that spawned mortgage fraud where appraisers, brokers and accountants recruited buyers, inflated prices, drew up fake tax returns, got huge mortgages, paid developers less than the mortgage raised and pocketed the difference. Such is the backdrop to the subprime crisis.

Now in confirmation, we have the report that the FBI is conducting criminal investigations into how subprime loans were made and packaged, and how securities backed by them were valued. There are also questions of insider trading violations.

This was always going to happen. And for the record, the FBI has been on this case for year but the Subprime Meltdown is now bringing more of the problems to light.

Which raises an important question. The Securities and Exchange Commission is conducting its own investigations. But if the FBI had been on to this for years, why has it taken the regulator so long to do something about it? It's closing the barn door after the horse has bolted.

Gives a certain context to the SEC's latest move, as reported by Bloomberg's Jonathan Weil, which allows the subprime lenders to engage in some accounting trickery and make their balance sheets look a lot smaller and less debt-laden.