Drew Horn

Wall Street Breakfast: Must-Know News

The Obama crowd have adroitly skipped over the "too big to fail" issue. As long as capital reserve accounting standards remain the same and it is up to the banks to determine asset value, they will overvalue them to increase their real return on investment.

The old trick of moving auditors around till they are too confused to think straight has morphed into creating organizations that are so complex auditors/ regulators have no chance of truly understanding the firms they examine. The proposed changes in regulation are half measures designed to look like they are tough but allow the firms that are "too big to fail" to get bigger. If anything, the proposed change sets up the business cycle for greater peaks and valleys and eventual collapse.

Too bad, this is a missed opportunity to bring honesty and discipline to financial markets. But on the plus side, people like Paulson & Geithner, et al, have made a lot of Wall St friends and have the prospect of great jobs when they leave us with the mess they created.