The Text of President Obama's Wall Street Speech:

I'm afraid I don't have time to comment on it at the moment, but in case you are interested in reading the as-released text of President Obama's September 15, 2009 speech on Wall Street, on financial regulation reform, it is here at the New York Times.

Overall, and despite the large amount of stuff sent by the administration to Congress since the release of the Treasury White Paper, I am disappointed that financial regulation reform is not really moving very far, very fast, and is subject to three enormous weakeners - the speed with which fear that gripped everyone a year ago at this time recedes into a mere memory mostly of catastrophes avoided and hence discounted, the lobbying force of the financial services industry when it deals with Congress, and the fact that long term financial services reform - while always, of political necessity, on a backseat from dealing with the recession - is actually farther down the list of the Obama administration's domestic policy issues than I would like, after health care reform, and issues related to the recession and stimulus, bailout of the auto unions, etc..

Everyone seems agreed, so far as I can tell, that not only will Fannie and Freddie not be addressed until next year, other fundamental reform issues will not be dealt with by Congress, either. And when they finally do, the sense, not so much of urgency, but instead that fundamental changes are needed, has largely evaporated. Yet the incentives remain as perverse as they were before; the question is whether there is a supply of funds and a market of sufficient opacity, short-termism, and too-big-to-fail-icity that it can do what the mortgage markets did mid-decade. Greed is rapidly replacing - has already replaced - fear in all the wrong places. Those places are principally, of course (a) Wall Street, for whom externalized risk and moral hazard are back, without fundamental changes in the regulatory or compensation rules and with an ever-firmer belief in the USG-put, and (b) Congress, making its rent-seeking calculations, meaning, how much its members will be able to benefit from making available the USG-put.

(Update: The NYT economix blog has a good series of short reactions to the speech. And the NYT room for debate blog (in which I sometimes participate on national security matters) has a discussion of why financial reform has stalled, as I indicate above.)