We just quit regulating

As if our financial safety was not as important as health and welfare? We convinced ourselves over decades that it was ok, to not understand the implication of serious change to regulation.

Let me put this in medical terms. Regulation is our immune system. America has financial AIDS. Normal healthy companies are viewed as destructive. Destructive products are views as healthy. This is what happens when you remove or ignore the rules of structure.

If you want to gamble, go to Vegas. Do not take our livelihoods as the basis of the gamble. A company like GM cannot take the stress of marketing its product and marketing its stock. Other people (Other than GM's board) were given authorization to create product involving GM stock. These products had nothing to do with GM's product line.

The reason sports betting is allowed is because you cannot not bet on the shop. You cannot go to the Mirage and bet on the Mirage. You bet the game with cash. You cannot bet with credit. Yet this was allowed in brokerage houses.

There have been two camps; Those who wanted fewer rules and those who wanted fewer regulators. In 2006 we finally reached the pinnacle of this insanity.

This is a report on Glass-Steagall from Frontline : A chronology tracing the life of the Glass-Steagall Act, from its passage in 1933 to its death throes in the 1990s, and how Citigroup's Sandy Weill dealt the coup de grâce.

Games that have few rules allow for/require, more and more volatile failures. These failures will continue to get worse until they are monitored by enforceable rules. All forms of derivatives must be removed from the market. Derivatives are good information, they are not good product. The people who create the derivative have no fiduciary responsibility to the company on which the product is based. Whereas the people who create the value to the company stock do have a fiduciary responsibility to the owners of the company.

A system with few rules is so boring, people will not play. American Football is a game of rules. Everyone must play to the rules and ignorance of the rules is not allowed. What the hell is a 'false start' in Rugby? Americans love the game of Football because of its rules. But even rugby has rules. Rugby is a riot with rules. Without the rules it is just a riot.

I could not allow people who were trying to circumvent the rules to continue. Beyond regulation is reality. We use rules and regulation to curb/alter the effects of reality. Reality is brutal to the ignorant. I don't care if you choose to be ignorant. Just don't be surprised when reality slaps the shit out of you. You don't want to ever know reality.

It is known that financial jobs are already lost. This last spike in the market showed that the system can handle the loss of the human moderator. That is the difference between 1987 and this spike. The system corrected the change in rules with minimal failure.

It is known that all the rules based computational systems saved the system from human fear. Information and rules protected the system, especially when the humans enacted NYSE special rules for their own benefit.

Those who market the human interaction will not have a way to justify their existence. We will lose more jobs but we will have a stronger system for this loss. I don't care if broker/dealers have nothing to sell. You only need a sales person when a product does not justify its own existence. Thus sales persons are to be replaced by media and user interface tutorials.

You in the financial community may need to clean oil off birds with soap, so you can eat.

It is not necessary for the financial community to exist. We have created Ted Stevens' dream, a 'series of tubes' to replace you. It is already complete and tested. You, the financial executive are as relevant as the Dewey Decimal System. The only thing left to do is replace the human error. That will happen on its own, human error cost too much for business or even sovereign debt to support.