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Tuesday, August 9, 2011

Unregulated Freefall

Aug 9th, 2011

Does anybody still think we actually need less transactional regulation in the markets? Unfortunately, they probably do. However, Zachary Karabell notes:

"None of the reforms passed in the wake of the financial crisis create any breakers against synchronous global financial panic. Yes, there is less leverage and more capital in financial institutions, which is a vital difference between now and then and augurs against a repeat of what happened two years ago, but there are no circuit breakers that prevent the rolling flash-crash of the past week."

In particular, we have to roll back the "reforms" from 2006 that are allowing massive, computerized short-sells.

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