Or did I mean Wall Vegas? Now that its after the fact, everyone wants to take the Las Vegas out of Wall Street and return to a kinder and more advisory role for clients. But to do so, you’ll have to make some harsh changes to allowable leverage and even get rid of some financial instruments. Charlie Munger, Warren Buffet’s sidekick, suggests we ban all options!
To rid Wall Street of its Las Vegas tone, Munger suggests leveling the options exchanges in Chicago and New York, and banning completely all derivatives contracts, a rather impossible vision but one that’s true to his spirit. He’s also furious with the accountants, in particular for letting Wachovia (nyse: WB – news – people ) report actual profits on accrued interest from risky mortgages when, in fact, the interest wasn’t paid but added to the principal amount due on the mortgages.[via Forbes]
The idea to return to a more normal role for Wall Street institutions and sounder accounting methods is a great one and I welcome it, but I believe options have their place in the market. What are your thoughts?
