Lewis and Einhorn also do a good job describing just how broken are all the various checks against Wall Street excesses such as the SEC, and the rating agencies. The very agencies which are suppose to protect the investor instead have been effectively perverted to advance the interests of the financial firms and their senior employees against those of the investors. Driving much of this the direct career paths from regulating entities to the financial firms, and the hugely corrupting level of salaries and particularly bonuses at the financial firms.Lewis and Einhorn also do a good job describing just how broken are all the various checks against Wall Street excesses such as the SEC, and the rating agencies. Many Freepers want zero regulation everywhere. So laughable and childish. But the Bush administration sure behaved this way. 100% hands off the markets
It's like telling thieves that robbery is now legal
What we need is intelligent and honest regulation of Wall St financiers
They will run wild without it and the credit default swap mess is proof
In the case of Credit Default Swaps - if it looks, walks, and acts like an insurance instrument, then by gosh treat it as one. Simply adding a capital reserve requirement for CDS transactions would prevent an awful lot of mischief.
It is fairly simple to devise good ways to remedy the problems that led to the current debacle. On the other hand, it is very hard politically to have these solutions correctly identified and implemented. The current public policy fixes will only make matters worse.