There’s growing talk on the Street that the latest move from the White House to crack down on Wall Street could inadvertently harm the economy.
As you’ve been reading on this site, on Thursday President Obama introduced some new rules to prevent a return to the "old practices" that led to the financial meltdown.
Although they are complex the Street is largely focused on two major points: They are:
- Banks would be prevented from owning, investing in or sponsoring a hedge fund or private equity fund.
- Banks would be barred from proprietary trading operations, unrelated to serving customers, for their own profit.
(Proprietary trading refers to a firm making bets on financial markets with its own money, rather than executing a trade for a client – and can be enormously profitable.)
Chip Hanlon, president of Delta Global Advisors in Huntington Beach, (who runs a right-leaning political organization called RedCounty.com), said the proposal to cut bank ties to hedge funds and limit the growth of major Wall Street firms will hamstring efforts to grow the economy.
“I'm starting to call him Barack O-backwards because every one of his viewpoints on every issue is 180 degrees opposite from where it should be," Hanlon said in an interview with my colleague Jeff Cox here at CNBC.
If you think that’s harsh you should hear what CNBC’s Rick Santelli has to say about this latest move.
Santelli has never been one to hold back, but this time… well, see for yourself. Watch the video now!
