http://www.zerohedge.com/article/pa...-moral-hazard-and-calls-return-glass-steagall Along with the old brokerage model....The GS model is fatally flawed....along with its peers.... What is left of the old brokerage model will quickly be replaced by completion of the BATS induced model.... Brokerage evolution.... writing paper submissions paper to computer inputting paperless trading direct access electronic trading Next step.... direct access electronic de-fragmented worldwide exchanges.... transfer costs 20 cents per 100 units or less regardless of security type.... Information....wiki style format Direct access technology....seamless news... direct access electronic transaction ...whereby one instantly clicks on a chart to transact....reflective of exchange costs only....in a first come first served mandate....all security asset classes....first come first served....de-fragmented exchanges.... .................................................. The GS "Business Conflict of Interest" model will quickly become extinct.... for obvious reasons.... The biggest of which is "conflict of interest" between the business and its customers.... No one trusts this model....and is a stained and encrypted disease to a fair and balanced system.... Simple speak.... The old model.... Create public and private paper.... Own the exchange business itself.... Make money on transacting while being served first.... Own political sway and governance.... What has to happen.... Get rid of all conflicts.... Which means.... The New Model.... Creating public and private paper... This is the viable portion that is left of the old model....however legal largesse costs have to be removed....or this too will move to lower cost jurisdictions....
How can it be flawed? 1. The White House and Fed tell GS what they're going to do before the info is public. 2. The White House and Fed tell GS, "bid the market up, we'll backstop any of your losses with taxpayer money". Sounds like the PERFECT model, at least for trading.
In a world where the need to access more capital increasing at an increasing rate, underwriting reigns as ruler.