STILL READING

Come on.  The damn thing is 900 pages long and the heads up I was supposed to get I never got because they were still playing with the language up until last night.

First rushes on the Volker Rule make it sound as though with the exception of the dabble into criminal complaints on CEOs--which appear not to be there--the Volker Rule as constructed places pretty harsh restrictions on the manner in which American banks at least can continue in this business which has been know as banking for the last, well, I don't know for how long if you consider the trading of foreign exchange which predates me.  Fair to say, this is a sea change.

No comment until I see the language except to say as one commentator did earlier today that all the regulators around the world had better be on the same page otherwise the ownership of American banking shares might not be the place to be in the near…or far for that matter…future.  Forum shopping the regulatory haunts may be the game of the future and bugger thy neighbor could become very much in vogue.  And yet, for some of us, there is a bit of sangfroid in all this.  It was probably about 40 years ago when two tiered employment at banks became part of the game.  As regulations changed and technological change overwhelmed the industry, so too did the compensation structures at every institution.  From a collegial work enviorment, came the dog eat dog mentality of the trader evirorment, the "rip your heart out" trading rather than the "sure you mean Cable at 1.5678, mate?"  The institution meant nothing, the bonus everything and while we all wanted to make money, the effort became all-encompassing.  I'm sure there are a lot at my age not disappointed in this at all; indeed, there are many like me who walked away because of it.  "'Bout time The Masters of the Universe got theirs," many think tonight.  I admit there is some of that in me who vainly argued that the direction in which were headed might not be the best for the long term future of the institution or industry.  But when the "long term future" is defined as quarter to quarter, it's probably not a good argument.  You win some and lose some…and the trader's line is "I just have to be right 51% of the time


The fun thing is beginning the watch as to how the institutions are going to get around these new marching orders and believe me, they are going to try.  It will be harder this time because for once the politicians recognized they hadn't a clue and left the writing up to the regulators.  Believe it or not, the regulators do know something about what they are regulating; their problem has always been enforcement. Now if the new rules are as tough as advertised and if they are enforced, the best thing is to probably sit back, accept a few lean years of profits and publicize the hell ut of the drop in banking employment and return to the political arena for relief.  Worked before, should work again.  Hope you watch with me.  We start tomorrow.