The Slow Stumble To The Middle

Are the days of the financial lottery over? Is the excitement (and at times envy or disdain) of seeing a CEO or hedge fund manager make a killing a thing of the past? A new era of public ownership, and subsequent public oversight, may be signaling the end of the financial superhero (see WSJ article). The involvement of the Treasury in nearly every aspect of the financial system certainly means more oversight, more regulation, and more required regulatory capital: and of course, lower returns and paydays. The end result may be a slow stumble to the middle. Boring may in fact turn out to be better in the long-run, but suffering through another post-excess 1930s or 1970s market while Wall Street once again finds its way is not going to generate the page turning excitement of reading about your favorite superhero (or villain).