The independent Financial Crisis Inquiry Commission [3] got underway this morning in Washington. The commission was authorized by Congress to get to the bottom of the causes of the financial crisis and produce an independent report, much like the 9-11 commission.

The commission sent a strong message by first putting under oath the titans of Wall Street. They didn't pick the subprime mortgage lenders or Fannie Mae or Freddie Mac. They didn't pick the credit rating agencies. They didn't even pick the big housing or investment firms that failed. Instead, they chose the largest firms that survived the crisis and now are profiting off of it due to the extraordinary interventions of the U.S. government.

While the banks have long complained that they are being singled out for blame when it was the "unregulated" mortgage firms that caused the problem, it has now been revealed that the big banks funded or owned the mortgage firms that conned consumers into buying mortgages they could not afford. The banks also whipped these firms into loosening underwriting standards and selling more toxic mortgages, so they could package and sell them on Wall Street and around the globe. But you wouldn't know this from watching this morning's hearing.

The bank CEOs dodged responsibility by blaming market conditions, Wall Street practices and the lack of information, prompting Chairman Phil Angelides to comment: "this is beginning to look like Murder on the Orient Express, everybody did it."

But the most interesting and testy exchanges were between Goldman Sach's [4] Lloyd Blankfein and Angelides. Angelides channeled Gretchen Morgenson [5] from the New York Times, and asked Blankfein about Goldman's practice of selling its clients' mortgage-related securities then betting against them in the market. Angelides characterized this as "selling a car with faulty breaks and then taking out an insurance policy on the driver."

Blankfein vigorously defended the practice, saying repeatedly that: "we are a principle, we are not a fiduciary, not an agent, we don't manage someone else's money." Later, he justified the practice by saying that they only sold the toxic products to "the most sophisticated investors who sought the exposure," which is no doubt a comfort to the pensioners and cities who bought Goldman's waste. Angelides also demanded to know if Goldman disclosed their contrary position to their clients, but Blankfein's lack of response clearly indicated that they had not.

For average Americans, this type of proprietary trading just does not pass the smell test. Commissioner Brooksley Born, the former head of the Commodities Futures Trading Commission, was right to focus on proprietary trading and demand detailed documentation on the practice from all the banks going back four years. Born suspects that these profitable firms knew more than they are saying about the dangers of the toxic products they were peddling.

But the commission failed to coordinate its inquiries so that the critical questions: what did you know about the toxic mortgages, when did you know it, and why didn't you warn the American public? have not been vigorously asked, nor answered.

On its first day of operations, it is clear that the Financial Crisis Inquiry Commission is in need of its own Hercule Poirot.