The idea was to limit the amount of risk taking and systemic hazard that the primary banks could engage in, limiting their need for taxpayer funded bailouts in the future. The audacity of an industry asking regulators to go easy on it when it has demonstrated time and again in the post crisis period that it has not changed or cleaned up its act one iota. Despite repeated promises to do so exposes the charade led by the regulators who fail to enforce the rule of law. This very failure was identified as one of the primary causes of the 2007-2009 financial crisis as per the findings of the crisis task force. The implosion and 40 odd billion Dollar bankruptcy of MF Global in 2011 shortly after it asked for and received waivers to comply with a number of regulatory requirements again illustrated the hazards of failing to enforce the rules. Rules that still aren’t enforced with respect to big finance and frankly I seriously doubt they will be because their lobbyists and special interest groups own the regulators and politicians lock stock and barrel. One only has to glance at the history of the post bust period since 2008 to see that this is true, in fact it’s glaringly obvious. While I respect a person or entities right to be reckless and irresponsible if they so choose, taxpayer funded bailouts should be categorically out of the question.
This is Caleb Lawrence Registered Investment Adviser Scotts Valley Drive and Willis Road in the Scotts Valley Plaza, Suite 202 or call me toll free at 888-RICH PIG / 888-742-4744.
You can catch me on the radio at noon each business day as well on California’s central coast. KPIG 107.5 FM in the Monterey Bay or KPYG 94.9 FM in San Luis Obispo.
Rebroadcasts, additional writings and other entries are also available on my Blog at www.clinvestments.com
Advisory services offered through Caleb Lawrence Registered Investment Adviser Inc.