A new book from Barron’s options editor Steven M. Sears, excerpted in the latest issue, offers this assessment of financial regulations:
The market will, of course, recover from its excesses, and it will, of course, fail again. The birth of every bull market will always occur in every bear market. Laws will always be passed. And those laws will fail to prevent another crash while burdening businesses with the expense of complying with massive regulatory requirements destined to be circumvented, if not outdated, shortly after they are passed.
The laws will do little to improve the lot of the individual investor. The primary beneficiaries will be law firms and management consultants, who will reap huge profits helping corporate America implement, interpret — and likely step around — more than 2,000 pages of new laws passed after the credit crisis. By 2011, Debevoise & Plimpton, one of Manhattan’s top law firms, was charging $100,000 to write a 17-page letter that explained the meaning of “bank-owned hedge fund.”
It’s nice to see another reference to the “staggeringly complicated consequences of the Dodd-Frank financial-reform bill.”
