Our Capital Markets need More Regulation, not Less

Merrill Lynch engaged in deals with hedge funds that may have been designed to delay recognition of losses from mortgage securities. The SEC is likely to investigate. Merrill shares tumbled more than 9%.

What other skeletons are in their closet? Isn't this shameful?

We have heard so much about how our alleged dislosure law reform, made the U.S. Securities and Commodities markets "less competitive."

How Sarbanes-Oxley makes electronic startups less competitive
The legislation may have prevented accounting debacles, but it's also had a chilling and unintended consequence: reducing or eliminating the attractiveness of an IPO as a growth strategy for small electronics


Really?

Has a more transparent and accountable set of laws made the Subprime meltdown any less severe?

Has the Sarbanes-Oxley bill forced Merrill Lynch and other Financial Firms to violate regulations and to leverage themselves, and violate our trust, beyond tolerable risk levels?

Obviously, no. We need more regulation of our capital markets. Not less.

The National Futures Association alleged that Peregrine Financial Group failed to comply with their Compliance Rules.



NFA's BCC issued a Decision to Peregrine accepting Peregrine's settlement offer in which the firm neither admitted nor denied the allegations of the Complaint. The BCC ordered that Peregrine pay a $5,000 fine within thirty days of the date of the Decision. The BCC also ordered that Peregrine adopt, and submit to NFA within thirty days of the date of the Decision, procedures to ensure future compliance with NFA's Compliance Rules as they relate to the supervision of conditioned registrants. Finally, the BCC ordered that Peregrine adopt, and submit to NFA within thirty days of the Decision, procedures to ensure future compliance with all provisions of the Amended Final Order Granting Conditional Registration to Dominick Concilio.


Oh yeah, and have you head about the "Bubble Alert" that we are being warned about? Who is responsible for this mess?

So, yeah, this inflation thing is nothing to worry about. Which is why investors continue to plunk money down in hard assets and buy up dollar-denominated products like oil and gold, both of which surged again to finish another day with those “highest price since Columbus” headlines.
Both gold and oil have gained around 60% in the last two years.

A few years ago, $100-a-barrel crude oil and $1,000 gold would have seemed completely ridiculous. But the markets are on the cusp of grasping the former, and at this rate, the latter isn’t too far off. (Many will say, “c’mon, $1,000 gold is ridiculous,” but admit it - you hesitated before saying that this time.)

As the dollar continues to decline these assets get cheaper for foreigners to buy, but they’re not the only ones, considering the steady demand coming from the U.S. as well. With world economies still in reasonably solid shape, the commodity demand remains strong. “The dollar is falling and is making dollar-denominated assets cheaper so you get gold and crude going up and that’s probably going to keep going for a while,” says Patrick Kerr, president of Oilgasfutures.com, a commodity brokerage.


What he’s been hearing lately — and this might be a “bubble” alert — is that there are many fund managers discussing the idea that people are underallocated in these assets, with too much in equities and bonds. Buying in at $100 oil seems a bit foolhardy, but then again, people said that at $70 and $80 as well (which was a day or two ago, if we remember).

So, let's put this into some kind of perspective--the Financial Firms are complaining that we are not "competitive" because they are over-regulated; while at the same time they have over-leveraged themselves, violate the requisite regulatory guidelines, and expose us, average Americans, to an unprecendeted level of exposure to financial ruin, to no fault of our own.

Isn't it time to regulate the Merrill Lynch's, the Peregrine Financial Group's, the Citibank's, and the rest of the Financial Firms, with more scrutiny and regulations?