This will be a brief update because I am on the last leg of the Commonwealth Live! road show. I was delayed in posting earlier this week because of travel, and I figure it is probably better to get a briefer posting up in real time rather than a longer one the next day. Let me know if you agree or disagree.
The big story today, on the front page of the Wall Street Journal and the Financial Times, and on the first page of the New York Times business section, is a reversal by the man who, more than anyone else, was responsible for the emergence of the mega-banks: Sandy Weill. He was quoted as saying that banks need to separate the investment banking and commercial banking divisions, taking banks back to a point where they are not putting taxpayer money at risk and are not too big to fail. This really does represent a sea change in attitudes—one that starts at the top. Mr. Weill is not the only senior banker to take this position, either. Others include the former CEOs of Citi and Morgan Stanley.
I totally agree with Mr. Weill’s (new) position on this. Reimposing the Glass-Steagall restrictions would be a great first step in getting some of the institutional problems in the financial system under control. In light of the problems that keep appearing with large banks, the status quo is becoming more and more difficult to defend. Expect to see the momentum for change accelerate.
There are no other meta-stories of note. Coverage includes continued weakness in Europe, the drought in the U.S., and many political stories.
Have a great day!