Last year around this time, when markets were melting down and the world was seemingly coming to an end, Jack Vogel appeared on CNBC and lamented the high level of risk in the modern financial marketplace.
Today on CNBC, Sandy Weill, former chairman of Citi, visionary in his field like Vogel, and the man behind the modern investment banking structure, called for a return to sanity. Specifically, he said it was a mistake to repeal Glass-Steagall, the set of Great Depression era reforms that, in essence, prevented banks from leveraging to infinity.
Will the markets pay heed to the advice of the man who essentially authored the repeal legislation, and who is now issuing a mea culpa? Nah, all the way back in 2011 Vogel's main target was ETFs (exchange traded funds), which over the past year have seen record inflows and are now widely viewed as the main reason market liquidity has stayed relatively steady over that time (while nobody has tried to claim they are any less risky or understandable to investors).
All the way back in 2010, Alan Greenspan was on CNBC with a mea culpa about his cheap money policies. Response? QE, QE2, Son of QE, Bride of QE, QE does the Twist...
In related news, the new Farm Bill features even more money for Food Stamps than the previous one, taking up a far greater portion of limited funds than research or conservation incentives. Why are these things related? Because everybody loves welfare. When you reach the point where you expand welfare for everybody from banks to single mothers or the entire economic system will collapse, you're supposed to stop. This year we have another oracle trying to reason with a junkie, and so it goes.
