I learn from my mistakes. That doesn’t mean I don’t make the same ones over again, it just means that I learn from them, sometimes more than others. Now one might think that knowledge garnered from making mistakes would help in the avoidance of unpleasant situations, but that is not necessarily the case. For I, like the government, just sometimes never seem to get it right.
If you have been following the latest chatter on Wall Street and in Washington, you can see that both sides have determined that it’s time to set up some new rules for the finance industry. Maybe add some new players to the game. After all, the making of money over and above any semblance of sanity as of late has us all a bit leery of handling the responsibility of making money the old fashion way; listening to a broker or investing on our own that is.
Lucky for us Wall Street and the Government have decided enough is enough. Both parties made a lot of mistakes and agree each has been a bit lax in their respectful duties. Wall Street in it’s ability to police itself and the government in it’s job of policing and enforcing regulations that are under constant attack for being either too weak or too stringent.
The grand mea culpa both sides have used post nauseum of course is that this is not your father’s financial system. Did we find new ways to make money since Dad passed on? Oh did we ever. And are these new ways of making money fairly complicated? Oh yes they are. Did we make a lot of money with them? Some did and some didn’t. Could it be that some people took advantage and were let us say, dishonest? Maybe! So now we are lead to believe we should throw the baby out with the bathwater in our efforts to reform the system? Sounds like what we are hearing.
Government’s job has never been to tell you how to invest. Up until now that is. In a recent NY Times article Treasury Secretary, Tim Geithner said, “This financial crisis was caused in large part by significant gaps in the oversight of the markets,” He added that there needed to be a new transparency in the trading of derivatives and that the government should have the right to limit how involved in derivative trading a company can get. That’s not a long walk away from telling you the same thing. Am I yelling the sky is falling or are you investors feeling a chill run down your spine? Depends on how far right or left you are in your investment thinking. Some will dismiss this as a shot over the bow as warning others, just call it a near miss with more to come.
The America Dream has always had two parts to it; you can make it big here and you can go broke. Granted the bigger the come back you make from going broke the better. Let’s never forget the immortal words of PT Barnum that a sucker and his money are soon parted! But when government who’s job has always been making laws and enforcing them wants a seat at any investment table other than as reader of the rules that is a big mistake. After all, they have every investors’ bet covered both ways; they tax the winning and the loosing, whose side are they on anyway? Given the fact that most government jobs rotate back and forth between industry and regulatory we need to be concerned.
Loosing is always part of a game of chance. And no matter if this is your father’s world of finances or your grandson’s, it’s still a game of chance.