Wealth Evaporation

This year the Obama administration is planning some of the most dramatic changes ever implemented in the way that wall street does business. In a recent interview on meet the press Tim Geithner, the Treasury Secretary, divulged that plans are under way to regulate the way Hedge funds can operate within the stock market. Their goal is to move away from the boom and bust era we are seeing in today's economy. How will this be accomplished? by reinstalling the uptick rule and other mechanisms that regulate trades made by highly influential individuals that manage these funds globally. I also believe that they will limit the trades this administration has coined as bad bets, where a fund will actually bet huge amounts of cash on the decline or rise of stocks, institutions, commodities and other investment vehicles. Since the definition of a hedge fund is a highly speculative, loosely regulated, investment tool, this type of change will greatly diminish the ability to secure the large amounts of liquidity made in recent years. Some of these financial geniuses have made as much as two billion dollars a year themselves, with George Soros making over one billion in 2008 in a nightmare market scenario. The flip side is that everyone from the average worker investing their hard earned retirement money, to the marginally wealthy American with less than one hundred million dollars will be making a fraction of the potential yields that they saw in the markets past. This will stagnate Americas ability to achieve accelerated wealth models that put us in a class by our self. We will not only suffer the wealth evaporation to date in the form of stock losses, but the wealth evaporation in limited future, stock gains.