Office holders after Volcker are not worth mentioning as they contributed to the embarrassing mess in this nation’s commercial, financial and “human” environment…. claiming they could not see it coming.

I am surprised that Paul Volcker is willing to put up his hand for some broad outlines of a vague, populist proposal to limit bank proprietary trading…. possibly the least damaging of potential issues to create havoc in any bank – big or small.

The banks too big to fail have grown bigger since March 2008, well assisted by the former and current government while lending to small and medium seized businesses is on the back-burner… otherwise management of these banks would have lost the plot.

And America is suffering while they are financing the banks’ certain bets to short term prosperity when buying treasuries yielding 100 to 400 bps while having a cost close to zero.

Should the Obama-fanatics wish to rein in some buffers to off-set future losses (or the current ones not yet booked due to mark-to-myth rather than mark-to market principles) a simple, easy to administer and control method is to tax say 75% of the margin from the treasury trades or to establish a reserve calculated the same way which cannot be included in the capital adequacy ratios of any bank until dissolved.

But hey, such measure is possible too simple or is it too simplistic for the Wizards of Washington to embark upon.

The stern, precise and non-wavering Volcker when “whipping” markets with a sustainable interest rate policy, thereby avoiding bubbles and excessive, non-productive rubbish, is now siding with a president very similar to the former in terms of anomalies and extremes … maybe somewhat different in nature but distinct contrary to the Volcker doctrine that I learned to respect.

Sad. Really sad.

Derivatives are not an innovation, they are a party trick that has been used primarily to move wealth from the asset into a fantasy land of algorithms that fail as often as weather forecasts.

Don’t under estimate the populist movements that you like to ridicule as naive, that is how this whole thing started.