US banks are at it again
NEW YORK – A year after the financial system nearly collapsed, the nation's biggest banks are bigger and regaining their appetite for risk.
Goldman Sachs, JPMorgan Chase and others — which have received tens of billions of dollars in federal aid — are once more betting big on bonds, commodities and exotic financial products, trading that nearly stopped during the financial crisis.
• There have been no significant changes to the federal rules governing their behavior. Proposals that have been made to better monitor the financial system and to police the products banks sell to consumers have been held up by lobbyists, lawmakers and turf-protecting regulators.
• Through mergers and the failure of Lehman Brothers, the mammoth banks whose near-collapse prompted government rescues have gotten even bigger, increasing the risk they pose to the financial system. And they still make bets that, in the aggregate, are worth far more than the capital they have on hand to cover against potential losses.
• The government's response to last year's meltdown was to spend whatever it takes to protect the financial system from collapse — a precedent that could encourage even greater risk-taking from the
Lobbyists for hedge funds, the large investment pools that cater to the rich, have been able to fend off proposals that would require them to register with the SEC and regularly disclose their holdings.
And they, too, are profitable again after a dismal 2008. The 1,000 largest hedge funds in Morningstar's database posted average returns of 11.9 percent through July. In 2008, those same funds lost 22 percent on average.
"Have there been changes around the edges?" says Timothy Brog, portfolio manager of New York-based hedge fund Locksmith Capital. "Absolutely. Have their been systematic changes? Absolutely not."
http://news.yahoo.com/s/ap/20090913/ap_on_re_us/us_meltdown_same_old_wall_streetwell technically it's the fault of the people doing it to themselves, but hey what can you do against such a power.
just goes to see who wields real power
