| On Wednesday, with great fanfare, President Obama announced his administration's long-awaited, much-hyped overhaul of financial regulation. Yet the stock market barely budged—it even rallied Thursday—and the response was muted in bank board rooms and on Wall Street trading floors. Why? Because the bankers knew they had dodged a bullet—big time. Billed as the biggest reform of the financial system since the New Deal, the plan eliminates one regulator, creates another, gives more powers to the Federal Reserve to oversee financial institutions, and creates a council of top regulators to monitor systemic risk. But it fell short of earlier proposals that would have overhauled a regulatory system that failed as completely as the financial markets did over the last couple of years. By declining to consolidate the banks' many regulators into a simpler, more effective core, the administration may have missed a once-in-a-generation opportunity to fix what was so obviously broken. That's good news for the congressional barons who get to protect their turf—a key consideration in drafting this plan. But it's even better news for the financial industry and its powerful lobbying arm. As Edward Luce wrote in Thursday's Financial Times: "Certainly, most of the financial sector lobby community is happy with what has emerged. 'The Treasury department consulted very widely and has produced a careful and balanced proposal,' says Scott Talbot, vice-president of the Financial Services Forum, a Wall Street lobby group." Translation: We won. The transformation has been astonishing. A few short months ago, bankers were being excoriated in front of congressional committees. The public's outrage over Wall Street compensation was boiling over. In response to the bonus scandal at AIG, Congress passed a ludicrous bill to tax up to 90% of employee bonuses in companies getting taxpayer help. Former Masters of the Universe were now whining about being misunderstood. But now bankers have quietly won a series of victories on Capitol Hill and in Washington's corridors of power, where they've always done best... | 
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Reuters - Police and anti-capitalist protesters clashed at the University of Pittsburgh campus on Friday evening, hours after the Group of 20 summit of rich and developing nations ended. Full Story
