Goldman, Merrill Open Books, Loosen Collars

FINANCE
• The SEC is investigating whether banks and brokerages are hiding subprime lending losses. Goldman and Merrill are the first to be scrutinized. [WSJ]
• This is how bad the market is right now: Even music bloggers are worried about it. [DealBreaker]
• KPS Capital Partners is ditching its MetLife Building penthouse for a two-story space on 66th and Lex that leaves room for expansion. [Deal Journal/WSJ]

FASHION
• The Barneys sale isn't as smooth as it seems: Jones Apparel Group's CEO and board of directors are fighting over it. [NYT]
Nylon will sell its branded products in Urban Outfitters, beginning in September. [WWD via Racked]
• Lydia Hearst will shill Heatherette's new makeup line. Just think about that for a second. Heatherette makeup! [Fashionista]

MEDIA
• Remember FuckedCompany.com? The magazine world has one too: MagazineDeathPool.com. [Business Week]
• Making WSJ Online free may cost Murdoch more than just subscription fees: Thanks to the site's exclusive and affluent visitor-base, it charges four times as much as the Times for ads. [Business Week via Romenesko]
Portfolio's second issue is down 63 ad pages and one deputy editor. [Folio]

LAW
• Not your average family feud: Philippe Dauman Jr., who recently received a joint J.D./M.B.A. from Columbia, is going to work for Google even though his father, Dauman Sr., a former Shearman & Sterling partner and the current Viacom CEO, is suing Google for billions and billions. [Law Blog/WSJ]
• Despite the recent success of some law blogs, lawyers may not be the most new media savvy — only 5 percent of firms maintain some kind of blog. [Legal Blog Watch]