Obama\’s plans for changing the way Wall Street works. I\’m still pondering myself but think that there\’s good value in there. However, here\’s our favourite retired accountant:
Those of us who have been calling for massive reform for a long time are entitled to say better late than never……There’s no doubt Wall Street did not expect this. Nor London either, to where the contagion will rapidly spread, I suspect, to our benefit on this occasion.
Makes me wonder if my initial impression is correct, finding agreement there.
Or here\’s the Wall Street Journal:
Phony populism aside, yesterday Mr. Obama introduced his first serious idea into the debate on reforming the financial system. In calling for an end to proprietary trading at firms with a federal safety net, the President showed that he now understands an important principle: Risk-taking in the capital markets is incompatible with a taxpayer guarantee.
Under the President\’s still-sketchy plan, firms that hold government-insured deposits or are eligible to receive cheap loans in an emergency from the Federal Reserve would not be able to trade for their own accounts. The firms could facilitate customer orders as brokers have always done and continue to underwrite new issues of stocks and bonds, but they could not make bets with their own capital or own or invest in hedge funds.
Yesterday\’s announcement is a critical departure from the reform plan Mr. Obama introduced last year—largely incorporated in the House and Senate bills written by Barney Frank and Chris Dodd. Those plans all sought to expand the universe of too-big-to-fail companies eligible for taxpayer rescue. Mr. Obama has at last joined the most important policy discussion: How to eliminate the moral hazard now embedded in the U.S. financial system.
Now that does make sense. Which leaves me with the problem of finding myself greeting the proposals on the same side as Ritchie. Very confusing.
D\’ye think he actually understands what is being proposed?