Instant View: Obama scolds Wall Street for fighting reform

NEW YORK (BestGrowthStock) – U.S. President Barack Obama scolded Wall Street on Thursday for risk-taking that led to the financial crisis and urged the banking industry (Read more about the banking industry recovery.) to stop its “furious efforts” to block tighter regulations.

In a speech in New York attended by several Wall Street executives, Obama blamed the financial meltdown and the recession that followed on a “failure of responsibility” by both Washington and Wall Street.

He warned that the country faced a repeat of the crisis without new rules to rein in the financial industry in a speech that tapped into public fury at big banks and pushed a Democratic regulatory reform bill that is gaining traction in the U.S. Senate.

The following is reaction from industry analysts and investors:

DOUG ROBERTS, CHIEF INVESTMENT STRATEGIST, CHANNEL CAPITAL

RESEARCH.COM, SHREWSBURY, NEW JERSEY

“He doesn’t want to kill off the banking system and start another run on it because then that puts him in a position. But at the same time it’s good politics for him in terms of approval to basically want to rein in Wall Street. It also puts the Republicans in an uncomfortable position.

“What I think the real danger with all this is, is the secondary effects, which is once you start getting into it does this thing take on a life of its own and at that point you kind of loose control of the beast.

“As long as it’s not something the destabilizes the financial system it doesn’t necessarily bode badly for the market maybe just for financials.

“The money center banks are really not the primary source of lending at all, it’s really more the secondary banks and this is really directed more toward the money center banks than the secondary banks.

“I don’t think politically it’s expedient for them to bail out Wall Street and then bill Main Street. Though the may have felt a need for systemic reasons to bail out Wall Street what you’re seeing this all talking about is Wall Street footing the bill.”

KEITH SPRINGER, PRESIDENT OF CAPITAL FINANCIAL ADVISORY

SERVICES IN SACRAMENTO, CALIFORNIA

“What he’s saying is pretty much expected, he’s trying to gain momentum, get public sentiment behind the proposal.

“Banks are a huge lobby. The banks control a lot of trading on Wall Street and if you curb their trading, it’s going to cost them a fortune.

“Absolutely something is going to pass, there’s no question about it. This is the first time we’ve seen both sides of Congress come together and they both agree that something needs to be done because the public is behind it.”

MATT MCCORMICK, PORTFOLIO MANAGER, BAHL & GAYNOR

“It appears to me they have the semblance of a bill and it is going to happen and it is just a matter of when. I think most people view Goldman as the catalyst to get financial reform done.”

“He wants to keep the momentum going. He wants to essentially carry the ball over the goal line and get the political win. I think this is now about politics, not about economics.”

MARSHALL FRONT, CHAIRMAN, FRONT BARNETT ASSOCIATES

“To go to Wall Street and tell Wall Street that the populist rhetoric coming from the White house is not divisive, is disingenuous.”

Stock Market Investing

(Reporting by Steve Eder, Ed Krudy and Leah Schnurr)

Instant View: Obama scolds Wall Street for fighting reform