I DON'T GET THIS

The Masters of the Universe on Wall Street have very cleverly pissed away 100s of billions of dollars so there's a very modest move to increase regulation, yet some Free Market Fairy clowns insist that this will be bad for Wall Street?

Bush regulatory plan could do more harm than good
Mon Mar 31, 2008 5:05pm EDT
By Kevin Plumberg - Analysis

NEW YORK (Reuters) - A White House plan to overhaul the U.S. financial regulatory system could usher in an era of smaller investment returns and capital flight overseas as investors shy away from a tough new market cop.

"We should have a sensible regulatory framework, but if we have a punitive one we could further the migration of world capital markets to outside of the U.S.," said Haag Sherman, chief investment officer of Salient Partners in Houston, a fund with $7 billion in assets under management.

On closer examination (h/t Andrew Leonard), there really won't be much regulation of the "financial engineers" according to Michael Mandel of Business Week:

The Paulson plan makes sure to note that the new combined agency should engage in faster approvals of new financial products. As the executive summary says:

The SEC should also consider streamlining the approval for any securities products common to the marketplace as the agency did in a 1998 rulemaking vis-à-vis certain derivatives securities products. An updated, streamlined, and expedited approval process will allow U.S. securities firms to remain competitive with the over-the-counter markets and international institutions and increase product innovation and investor choice.