Follow up on regulators

Hello again,

In yesterday’s post, “a proposal for change, part II,” I said of the leaders and ideas of regulators needing to change:

“Regulatory agencies also need to change. Their primary sin in both the dot.com era, and the mortgage bubble era, was that they lacked the spine to reign in drunken frat-boy behavior. This is largely a leadership issue. Unfortunately, the leadership of these institutions is appointed by Congress and without support from the Legislature, regulatory heads usually blink when confronted by the Big Bad Business Wolf.”

Well lo and behold today’s WSJ coincidentally has an article about a Government Accounting Office (GAO) report that said:

“Banking and securities regulators identified weaknesses in how certain large financial institutions monitored risk in recent years but they failed to take strong action until after the financial crisis took hold.”

The GAO report was particularly critical of four regulatory institutions: the SEC, the Office of the Comptroller of the Currency, the Office of Thrift Supervision, and the Federal Reserve.

My point is that people are finally starting to pay attention and try and hold the leaders accountable for their poor choices.

I also cannot help but point out that readers of my blog regularly are getting information sooner and cheaper (free, except for your time) than the public. Let’s just say that having been a professional investor for a long time gives me some insights into how the financial sausage is made. And, by the way, you don’t always want to know what is in the sausage, even if you do need to know. Count yourself as informed.

Jason

PS – I like that financial market volatility is slowing down. The markets are starting to discount actual news events instead of emotions, that is a healthy sign that things are becoming more stable. However, we still have yet to go through First Quarter earnings season, or to hear from Europe, Japan and China as to how they are all doing right now. My suspicion is that the crisis is worse elsewhere than here – so hang tight.