On March 17, I said that the world has changed. I wrote.

I will not keep you in suspense, but the world changing event is the fact that the Fed has allowed investment banks to come to the Fed bank teller for money. That has changed everything. What this single action means is that investment banks will be able to tidy their bottom lines, letting the market recover. Though it also means investment banks will have to allow themselves to be regulated.


Well a financial regulation overhaul is in the works, and its not a minor change.

The Bush administration is proposing the biggest overhaul of financial regulation since the Great Depression. The sweeping plan is already drawing intense criticism — a debate unlikely to be settled until a new president takes office.

The 200-page document, which was to be released Monday by Treasury Secretary Henry Paulson, proposes giving broad new powers to the Federal Reserve to combat the type of severe credit crisis currently gripping financial markets.

It would designate the Fed as a “market stability regulator” and give it the power to examine the books of any financial institution, not just banks, that might pose a threat to the stability of the financial system.

My comment? Good! About time. One of the things that I noticed that will be regulated are futures, which is good. I think what their aim will be is to reduce the amount of leverage and that is a REALLY good thing.

I wish the Bush Administration luck!