Professor Elam

The Crash of 1929 and the resulting bank collapses brought the Investment Company Acts of 1933 and 1934. Investment companies were in such disrepute they had to be renamed and so they became

mutual funds. 

Now Chris Dodd wants to change banking regulation in light of the bank meltdowns. Of course the Senate had passed an act repealing Glass Steagall. That was another depression era reg that prohibited banks from dealing in the investment markets. In the 1920s loaning money on securities on 10% margin brought the banks down. That act was repealed in 1999 by none other than our own Senator Gramm, the result was Lehman, CITI, Bear Stearns, WFC all getting into the mortgage business and we know how that turned out. 

Look for lots of lobbying to make sure this does not pass…