I was recently asked whether there is too much - or not enough - Wall Street regulation. I replied that I would "sell the quantity and buy the quality." In other words, it's not the amount of regulation that matters, it's the effectiveness of the regulation in place-and until policymakers understand what they're regulating, it will be a lesson in futility.
The current conundrum - in terms of the entire financial dynamic becoming increasingly difficult - can be traced to parallel evolutions. The first is that we no longer have free market capitalism; as of 2008, the government rendered that obsolete. The second is that high-frequency machines have consumed the human capital in the marketplace over the last decade.
Wall Street - from the mechanism to the execution to the crosscurrents in play - has evolved much faster than most people can fathom, including many Wall Street professionals, who are as confused as the rest of the world. It's a changing of the guard; it takes no prisoners and knows no bounds. It's in many ways sad but in every way inevitable and it requires us to adapt to survive.
I feel as if an old friend has passed but alas, there is a difference between loss and loss. I was reminded of that this week when I paid a Shiva call to a friend who lost his wife too early in life. I've known this gentleman for 20 years and I'm certain that if I asked him if he would take a difficult environment over the loss of his beloved, he would make that trade every time.
In other words - yes, it's tough out there, but it could be worse; it could always be worse.