To read it, you would think that our featured Bloomberg article today, "Cox's SEC Censored Paper Showing It Ignored Bear Stearns Plunge " is about Cox, corruption at the SEC, high level cover-ups, a conspiracy to put every investment bank whose name does not start with "Goldm-" and end in "-chs" out of business, things like that. But you would be wrong. Very wrong.

Yes, the article does talk about these details...

Oct. 7 (Bloomberg) -- U.S. Securities and Exchange Commission Chairman Christopher Cox's regulators stood by as shrinking capital ratios and growing subprime holdings led to the collapse of Bear Stearns Cos., according to an unedited version of a study by the agency's inspector general.

The report by Inspector General H. David Kotz was requested by Senator Charles Grassley to examine the role of regulators prior to the firm's collapse in March. Before it was released to the public on Sept. 26, Kotz deleted 136 references, many detailing SEC memos, meetings or comments, at the request of the agency's Division of Trading and Markets that oversees investment banks.

...but the real story is even deeper. You can see it right here, the pangs. Oh, the humanity! The callousness of watching a man slowly drown in his own fluids and not lifting a finger to help. That, my friends, is watching a top-5 investment bank try to survive, to deleverage, without its 27 year old "top modeler."

An unedited version of the 137-page study posted to the Iowa Republican's Web site Sept. 26 showed that Bear Stearns traders used pricing models for mortgage securities that ``rarely mentioned'' default risk.

The firm lost one of its top modelers ``precisely when the subprime crisis was beginning to hit'' and writedowns were being taken, the full report said. ``As a result, mortgage modeling by risk managers floundered for many months,'' according to the unedited document, quoting internal SEC memos from April and December 2007. The comments were removed from the edited version publicly released by the SEC. (emphasis ours)

Cox's SEC Censored Paper Showing It Ignored Bear Stearns Plunge [Bloomberg]