Les Leopold

You can smell it on their breath – the tell-tale fumes of “financial innovation.”

Drink it and you start to believe that financial innovation actually exists. The commissioners and their witnesses are being ever so careful to insist that our economy will make room for it, not discourage it, not to over-regulate it , and to find market forces to enhance it.

Shelia Bair, the head of the FDIC, is the first witness get near to addressing the major underlying causes of the crisis: the distended, distorted nature of our finance-heavy economy. She discussed “economic distortions” and the “disproportional” size of financial profits in our economy.

The heads of Goldman Sachs, JP Morgan Chase, Morgan Stanley and Bank of America came to testify and said........just about nothing.

In its second panel, the Financial Crisis Inquiry Commission, heard from Kyle Bass, of Hayman Financail Advisors, who read a statement that had some real dynamite it. I don't know this guy, but it's pretty clear no PR flack scripted him.

As of noon on Day 1, the Financial Crisis Inquiry Commission is not playing hard ball with the CEOs of the largest financial institutions in the world. The commissioners have a golden moment to puncture the myths that justify Wall Street’s enormous grab of America’s wealth.

In the first skirmish of the Financial Crisis Inquiry Commission, Chairman Phil Angelides attempted to nail Lloyd Blankfein, Goldman Sachs CEO with a left hook: "Would your institution have gone under were it not for the bailouts?" Blankfein successfully parried the punches by saying no one knows...that they were doing the best they could...better than most. .

The first panel to testify on Wednesday before the Financial Crisis Inquiry Commission features a who’s who of high financial crimes and misdemeanors. Here’s the lineup.