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This article is pretty bad along with most NYT financial news coverage. A lot of critics blame everything on deregulation. But the big banks were the most regu
by lacker 18y ago
This article is pretty bad along with most NYT financial news coverage.
A lot of critics blame everything on deregulation. But the big banks were the most regulated part of the financial system, and they have imploded. Meanwhile hedge funds have the least regulation, and while they haven't been making money, they at least are not threatening to destroy our financial system.
The Economist had a much better article on hedge funds in the aftermath of the financial crisis.
http://www.economist.com/finance/displaystory.cfm?story_id=12381701 http://www.economist.com/finance/displaystory.cfm?story_id=1...
Particularly, hedge funds have not been allowed to hedge! If the government bans short-selling in the hardest-hit stocks, don't be surprised if a hedging strategy doesn't work any more.
- jimbokun 18y ago"But the big banks were the most regulated part of the financial system, and they have imploded." I think this is not true. It is my understanding that it was the big, less regulated investment houses that got into a lot of trouble with mortgage securities. The heavily regulated retail/commercial banks haven't suffered nearly as much. Unless we are defining "banks" differently...?
- lacker 18y agoYeah we are defining "banks" differently - I was considering both "investment banks" and "retail banks" as types of banks. You are right that retail banks haven't suffered as much, but considering Washington Mutual and Wachovia collapsing and several others signing on to the government equity purchase program, they're definitely costing the taxpayer more than hedge funds are. So far, at least....