If only we could get some REAL financial reform
As I make clear in my article on Fool.com today, I am none too pleased with the direction that financial reform has gone.
Is it better than nothing? Maybe, but I'm not really sure about that. The problem is that we already had oversight bodies and bureaus and whatnot before and during the panic and meltdown. They all seemed to get caught up in the same euphoric cloud as everyone else and they either misread cues or looked the other way entirely.
In other words, the same human failings that drive everyone in the private markets to bubbly extremes impact the judgment of the regulators that are supposed to put the brakes on.
There's no absolute solution to the problem of bubbles and crashes, but it doesn't seem to me that leaving it up to ill-defined, in-the-heat-of-the-moment human judgment is any different than what we already had. What we needed were some new rules, set out explicitly in black and white that would fix the worst leaks that led to the crisis.
As it is, I'm not only not confident that the new system will prevent some novel bubble and panic, I don't think it would address what we've been through if it happened all over again.