This morning, some takeaways from the president’s speech to Wall Street. Plus, an insider’s view of how Wall Street works.
Obama speaks to Wall Street (New York Times) I have little doubt this is an accurate description of the president’s speech:
There was no cheering section. The audience offered up only one round of applause, and a scan of the faces as the president spoke — grimacing, staring at the floor, nervously glancing at BlackBerrys — spoke volumes about how they felt as they listened to the president’s words…
… no bread was broken — literally and figuratively. They came, they listened, they left. There was little sense that the country was any closer to reforming Wall Street. After the speech, they all departed for their real power lunches.
What’s wrong with Obama’s Wall Street fixes (New York Post)
When more than one regulator oversees the same kind of activity, financial firms find ways to play one off against the other. It’s like what every 4-year-old has figured out — if Mommy won’t let you, maybe Daddy will. Or worse, if Mommy thinks Daddy is watching you, and Daddy thinks Mommy is watching you, then you can get away with anything…
Consider one of the most glaring examples — the bizarre division of labor between the Securities and Exchange Commission, and the Commodity Futures Trading Commission. If you buy and sell stocks, your overseer is the SEC. If you trade stock futures or their kin, you get the CFTC.
Much of the current financial crisis is linked to the strange financial products that fell between the cracks of the SEC and CFTC.
Why Wall Street gets paid so well (Forbes) Insider’s take from a former hedge fund manager. Good stuff.
Letting Lehman fail was the right move (Wall Street Journal):
Many people say that letting Lehman fail was the mistake that caused the financial crisis. To them, the lesson is that the government should never allow any “systemically important” financial institution to fail. If only Lehman had been bailed out, the story goes, we could have avoided much of a 45% drop in the S&P 500, a 4% drop in output, the rise in unemployment to 9.7% from 6.2%, and the $784 billion “stimulus” to top off a $1.59 trillion deficit.
This story is false.