This is not a good sign. But we should have expected it. Big booms tend to end with loud bangs that draw the attention, rightly or not, of criminal prosecutors. The merger boom of the 1980s. The dot.com boom of the 1990s. And now, the subprime boom-bust? The FBI has announced it is probing 14 firms in a wide-ranging look at the subprime daisy chain, joining the SEC and many state regulators. Mortgage fraud has been on the radar of the FBI for a while now. But if they decide to go after the top firms, the Merrill Lynchs and Morgan Stanleys, that would big news indeed. Stay tuned.  

For more:
- here's a New York Times article [1]
- regulators seek mortgage info from Goldman Sachs, Morgan Stanley. Article [2]