This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Sweeping Overhaul? Give Me A Break

Stocks in this article: C BAC XLF AXP WFC MET GE

NEW YORK ( TheStreet) -- Has the financial system been reformed yet?

Reading the news, you'd think something momentous had happened.

The New York Times calls it "the biggest overhaul of financial regulations since the Great Depression." Bloomberg goes out on a limb and calls it "the most sweeping overhaul of U.S. financial regulation since the Great Depression." The Wall Street Journal showed more restraint, but still stated that the legislation coming out of Congress will "transform financial regulation." Reuters couldn't find a way to avoid using the word "overhaul" in its lede, but, to its credit, got in a subtle dig in the second paragraph, saying it "may crimp the industry's profits."

May crimp? That's the best we can do in our sweeping overhaul -- possibly knock a few pennies off the profits of a Citigroup (C) or a Bank of America (BAC)?

The stock market didn't seem to be too worried Friday morning, as shares of those and other financial giants like Metlife (MET), American Express (AXP), Wells Fargo (WFC) and General Electric (GE) were all in positive territory a few minutes after the market opened. So was the Financial Select Sector SPDR (XLF), a widely-tracked exchange traded fund that serves as a proxy for the financial industry.

True, shares of financial companies have sold off in recent weeks, and Friday's gains aren't on a pace to undo that damage. But I wouldn't be surprised in a few weeks to see that financial stocks have touched new post-crisis highs.

We keep hearing that these are the biggest reforms since the Great Depression, but that ain't saying a whole lot. What's the competition? Sarbanes Oxley? Remember the sweeping overhaul of energy trading and accounting after Enron imploded? Oh, that's right, there wasn't one. Remember how everyone stopped insider trading after the sweeping investigation in the 1980's that brought down junk bond king Michael Milken? I mean I assume nearly everyone stopped after that since I can't think of anyone the Securities and Exchange Commission busted after that until the arrest of Raj Rajaratnam last year.

But regulators now have new tools, we're told. There will be a new council watching out for systemic risks. How much do you want to bet on the chances they're going to find them?

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,778.15 +421.28 2.43%
S&P 500 2,061.23 +48.34 2.40%
NASDAQ 4,748.3960 +104.0840 2.24%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs