Heads They Win, Tails We Lose

Much blather and hand wringing over "Banking Reform."  The solution is simple:  Don't let them gamble with government money.

Tunku Varadarajan interviews Nouriel Roubini.  Roubini boils down the Wall Street problem and what to do about it:

“Look, I’ve nothing against Goldman Sachs. But Goldman Sachs isn’t an investment bank. Goldman Sachs is a hedge fund. It’s bigger than any hedge fund. It’s more leveraged, to the power of three or five, than any hedge fund. And unlike other hedge funds, it has access to zero-interest loans from the Fed, and to implicit and explicit guarantees of the government.

So if Goldman thinks they are so good at ‘prop’ trading that they can make a profit every day—as they did in the last quarter… there was not a single day on which they lost money—fine, let them be a ‘prop’ trading firm, be a hedge fund.

But don’t use the taxpayers’ money to do stuff that’s very risky and highly leveraged.

Exactly.  No new bureaucracies and hierarchies of oversight boards and agencies.  Simply cut them loose and let them fend for themselves.