Hedgie Einhorn warns myopia still rules Wall Street, Washington

W, move over. Time to make room for two other “W”s in the shooting gallery: Washington and Wall Street. In a speech earlier this week, hedge fund manager David Einhorn spares no ammunition in detailing how the dynamic duo suffer from a potentially economy-killing (or at least dollar-damning) financial myopia.

The Greenlight Capital leader pummels Helicopter Bernanke and his sidekick Timmy Geithner for dumping taxpayer dollars to save the gold-plated keisters on Wall Street. Einhorn may be talking his book (and why not?) but his observations about why the dollar is going the way of toilet paper to the virtually unsolvable economic problems in Japan are riveting. The gloves are off  when it comes to the credit rating agencies — inept as ever in Einhorn’s first personal tale — and proposed regulatory overhaul.

The financial reform on the table is analogous to our response to airline terrorism by frisking grandma and taking away everyone’s shampoo, in that it gives the appearance of officially “doing something” and adds to our bureaucracy without really making anything safer.

With the ensuing government bailout, we have now institutionalized the idea of too-big- to-fail and insulated investors from risk.

David Einhorn Speech to Value Investors

Click on the link above to read the entire speech delivered to the Value Investing Congress in New York. It’s a keeper.

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