Now, to be fair, I went back and listened to Cox's opening statements, and in the shorthand of the Beltway, I believe he was signaling to Wall Street that the party is over, that some heads are going to roll, and that this game is rapidly drawing to a close.
So, to give credit where credit is due, Cox seems to get that this is a serious issue, and was signaling, as did the Senate Judiciary Committee, that those responsible for placing the markets in what could well be significant jeopardy are going to be placed in the crosshairs.
It's about time.
The rest of the hearing was a beltway CYA-fest, where the same weasels that have allowed the system to get into dire straights were trying to pretend that they gave a crap. It didn't work - they clearly don't. Not about investors, not about protecting us, not about level or fair playing fields. So I have mixed feelings, after a few hours to review what was said, and by whom. Cox seems to be sending the signal that he gets it, and that in a few months the door is going to get kicked down, and guys with badges are going to be coming in. The rest of the commissioners were doing their self-congratulatory shmooze fest. What will be interesting is whether Cox can carry the day, and restore some credibility and honor to the system, or whether this is going to be another sound-bite on CNBC, where he talks tough about subpoenas, and then nothing is done.
We won't have long to wait, methinks.
I, personally, am not holding my breath, as I believe that the right way to go after the miscreants is with plaintiff attorneys and discovery. Expose the extent of their misdeeds to a jury and the public, and get ready for the billion dollar judgments, and cries of outrage.
In 1934, following the revelations of the Pecora hearings, the SEC was formed, and chartered with protecting investors from the snake pit that was that era's Wall Street. It took a global depression and financial meltdown to get to the point where a special prosecutor was named, and where a generation got to discover how badly they had been raped by a sliver of NY. That outrage drove the formation of the current regulatory system. Know your history.
I hope that Cox is able to bring a semblance of integrity to the SEC's behavior going forward. He's the new boy at the dance - most of those purporting to be part of the solution are directly responsible for creating the problem they now are so concerned with rectifying. I find it implausible that these people can be depended upon to fix what they helped break. Maybe I will be proved wrong. I doubt it.
So, given my general pessimism about human nature in general, and the honesty and efficacy of the SEC in particular, I have spent virtually minutes carefully crafting a series of illustrations to animate my take on the hearings.
