Washington Has Always Demonized Wall Street
"Wall Street, as we knew it, is dead. The system that allowed the U.S. economy to be a dynamic innovator has been fundamentally broken and the implications of these structural changes have yet to be fully felt."
It's now commonly accepted that the economic meltdown has forever changed the nature of the financial industry. But the words above weren't written in the past weeks. They were penned by financial analyst Richard Wayman in 2003, after investigations by then New York Attorney General Eliot Spitzer led to a structural shift in the relationship between research and investment banking following the stock-market collapse of 2001-02.
Look to Beijing
A hundred years ago, London would have made sense as the spot where the world's leaders should gather, as they will this week, to grapple with a spreading economic crisis. The city was the early 20th century's nexus of finance and power, and Britain straddled the globe as the only true superpower. But we're in the 21st century now, and the G20 heads of state should not be plotting in the shadow of Big Ben. They should be sitting across from Mao's Tomb, near the Forbidden City, in the meeting halls off Tiananmen Square in Beijing.
The Consumer Is Not Dead
As the equity markets take another huge step down, it's assumed that American consumers are so shell shocked by their loss of wealth in both homes and stocks that they will continue to hoard what little cash they have. Yet the relentless negativity about the state of the American consumer may well be overblown. Consumers didn't begin this crisis, but they may very well end it.