“Even Some Senior Wall Street Executives Acknowledge the Lack of [Regulatory] Change Surprises Them, Given How Poorly the Industry Performed”

In an article showing that the Obama administration hasn’t brought any real change to the financial industry, the New York Times quotes insiders who themselves are surprised by the lack of change:

But even some senior Wall Street executives acknowledge the lack of change surprises them, given how poorly the industry performed last fall and the degree of government support necessary to keep it from collapsing.

“There was a general feeling that an enormous amount of additional regulation should be put in place to prevent what happened that weekend from happening again,” said Byron Wien, vice chairman of Blackstone Advisory Services and the former chief investment strategist for Morgan Stanley and Pequot Capital. “So far, we haven’t seen a lot of action.”

Robert J. Shiller, the Yale University economics professor who predicted the dot-com crash and the housing bust, said the window for change may be closing. “People will accept change at a time of crisis, but we haven’t managed to do much, and maybe complacency is coming back,” Professor Shiller said. “We seem to be losing momentum.”

Kenneth C. Griffin, founder and chief executive of the Citadel Investment Group, a Chicago-based hedge fund that manages $13 billion, said that regulators and lawmakers needed to impose rules so failing banks could be shut, rather than allowed to operate indefinitely with taxpayer support.

“We’ve taken a lot of steps for the worse, and not for the better, in terms of the structural underpinnings of our capital markets,” Mr. Griffin said. “We have to change the rules and correct the fundamental flaws in the financial system.”

When the companies themselves are surprised that the regulators aren’t getting tougher, there is something seriously wrong with the picture.

Print this post
This entry was posted in General. Bookmark the permalink.
  • Good catch, GW. Thank you for posting this.Change? Yes, we can hope, but the "leadership" of both parties are lying sacks of spin pimping for a psychopathic oligarchy. And that's an understatement of the comprehensive facts.

  • "When the companies themselves are surprised that the regulators aren't getting tougher, there is something seriously wrong with the picture."It's too simple to state, "[…] the "leadership" of both parties are lying sacks of spin for a psychopathic oligarchy. […]" as does the educator -Carl- in his comment.I think the expression is, "Those who can't, teach." And we should not forget, Bernanke himself is little more than a glorified college professor at Princeton. Has anyone visited Princeton recently? What a rat hole.Bernanke certainly is not some tool in the hands of lying sacks of spin and pimping for any psychologically challenged oligarchy though."Under-water" is the expression I'm looking for to describe the ethics common on the Internet. These sorts of tirades are under-water, under the ethical and moral water required to get a firm grip of the problem -writ large."Under-water" also describes much more in the economy that we all should be considering.A lot of real estate is under-water due to massive and ongoing deflation in that marketplace.This deflation is complicated. Real estate is not just under-water in a mortgage sense. The whole system of valuation in this marketplace has been under cut and is drowning in a myriad sea of spreading under-water-isms.In many localities, foreclosed homes have not had their property taxes paid for years. One can buy a home in Detroit for well under a grand (or any number of other communities nationwide) only to find the property is underwater with property taxes due on the parcel. E.g., the property is not worth even a small fraction of the unpaid property taxes due on the property.Municipalities are have no means to deal with this sort of under-water tax issue, because they are broke. This is especially so, given the assessed yearly taxes due on almost every property within these communities puts them underwater too. Underwater in the sense -the taxes a municipality is billing every year against these properties is disproportionate to the value of owning such properties.This is almost universally true for commercial real estate in the U.S. as a whole, and, it is increasingly true of residential, and even agricultural real estate.The taxing black hole of rising property taxes is strangling every community.How can regulators begin to address largely misunderstood and wholly unfathomed problems like these? They cannot.Everyone is playing their cards in this nightmare deflation scenario with blindfolds on. The whole system is broken no matter where you look.An article ago here, some exceedingly desperate fool is extolling the virtue of gold as a last resort to protect wealth. There is even a financial Phaistos Disk – pyramid – in the article.Like the Phaistis Disk, no one knows what it means. But it looks important.Gold too is under-water at $1000 an ounce. At $1000 an ounce Gold is a bubble.If you're trying to protect your wealth by buying gold, just who are you expecting to sell YOUR gold to, when you want to cash it in?Any regulatory changes are only going to look like some fool throwing buckets of water into the newly opened caldera of a hot, vomiting volcano at this point.The government isn't trying at all to put out the fire anyway.They're trying to channel to molten and oozing vital fluids running from the gaping wounds of this near-lifeless economic body.I mean come on people! Goldman Sacks, Bank of America and Morgan Stanley stock prices are all up more than 4X over the last few months on money the government has used to shore up those insolvent entities.That doesn't sound much like anyone has any appetite for regulation meant to slow down the speculative excesses that are giving the maggots so many holes to crawl in and out of.