Where Is The Change On The Street?

President Obama is encouraging the financial industry to reform itself voluntarily. Isn’t this the reason that got Wall Street in trouble in the first place? Some real regulation is what is needed. Some serious regulation.

What has really changed? Is there any accountability for what has already happened? Aren’t the same guys steering the helm?

William Cohan, author of “House Of Cards”, says lack of regulation is the real problem. Cohan should know Wall Street, since he worked there for seventeen years.

Cohan comments:

Nothing about the Wall Street infrastructure or architecture makes any sense to anybody anymore.

You had all these securities firms collapsing overnight, either into bankruptcy or into the arms of a third party. All of a sudden what happened six months ago seems to be completely evaporated from the current sensibility in the market, and you have people wanting to pay back their TARP funds as quickly as possible, so they can be free of government oversight and government accountability.

They’ll probably be wanting to return to the days of huge amounts of leverage again.

The (same) board members are in their seats. The CEO’s are in their seats. The only people that have really lost their jobs, are the people who’s firms collapsed.

But, there’s been no change in the leadership on Wall Street, and there’s been no accountability for what happened for the last two or three years.

They (bankholding companies like Goldman Sachs and Morgan Stanley) can continue to take all the risks like they were taking before, huge principle risks with their own balance sheets. And any mistakes that they make, they can back up to the Fed.

Again, it seems to me, the architecture, the design of Wall Street, needs an overhaul. Not a revamping so that it’s exactly like it was before. It’s a mad rush back to the status quo.