Uncertainty haunts Wall Street – MoneyWeek

ButthepotentialramificationsgobeyondGoldmanalone。

AsJohnMauldinsaysonInvestorsinsight。

com,theresneverjustonecockroach。

GiventhesheervolumeofCDOsacrosstheindustry,ifregulatorslookhardenoughtheycouldsurelyfindmoreevidenceofdisreputableactivityinthisarea,saysNicholasPaisneronBreakingviews。

Thereallyawkwardpointforthesectoristhatthiscomesjustaslaw-makersarediscussingawide-rangingfinancialreformbill。

Thedangeristhattheywillusethisasanexcuseforpunitivereforms,saysLexintheFT–suchasmakingbankshiveofftheirderivativesoperations。

Amoreaggressivepushtowardsfinancialregulationisgoingtofollowthisnews,saysDavidRosenbergofGluskinSheff。

Sotheindustrysprofitabilitylookssettobedentedbyregulators–justatatimewhenfinancialindustryprofits,proppedupbygovernmentguarantees,thesteepyieldcurveandrelaxedaccountingstandards,arecontributingthelionsshareoftherecentincreaseinoverallprofits。

Ex-financialearningsareupamere5%inthepast12months。

Asgovernmentstimulifadeandtheinventorybouncewearsoff,non-financialprofitsarelikelytolookevenlessV-shaped。

Sopost-Goldman,investorshaveanotherreasontobewaryofaseriouslyoverextendedandoverpricedmarket,saysRosenberg。

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