Istvan

From an article at Hedgefund.net about Obama’s announced financial reforms:

Mitch Nichter, a Paul Hastings attorney who specializes in advising hedge funds, told HedgeFund.net there were potential flaws in the proposal, particularly in the requirements for recordkeeping and reporting.

“Presumably [the information] would be about holdings and leverage and so forth,” Nichter said. “Is it going to the SEC or are they going to make firms publish the information on a Web site? Are they going to make us give away our secret sauce?” 

Greater oversight by the Fed and increased capitalization requirements for the Tier 1 financial companies have the potential to “significantly affect the way the bigger funds do business,” Nichter said. 

“The residual concern is that we will have over-regulation that is costly and isn’t well designed to achieve an objective,” he said.

I haven’t read Obama’s entire 89 page financial reform proposal, but I think it is pretty obvious that “secret sauce” made entirely of poison (credit default swaps, etc.) and complete lack of regulation is what got us into our current mess.

You have to be a pretty special kind of shitweasel to defend the status quo. These guys don’t really even want existing regulations to be enforced. Is yet another agency a good idea? Don’t know, but when “innovation” means to create a financial product so dense that you need MIT PHD’s to decipher them, someone needs to look out for the consumer.

More thoughts on this in Scott Jagow’s column over at Marketplace.

For an example of regulation in action, watch this episode of PBS’ Frontline about Bernie Madoff . As you get deeper into it, you see how everyone from Hedge Fund managers to government regulators turned a blind eye and let the fraud go on for years.

I did get to use the word “shitweasel” and rant a little, so I guess some good came of it.