REGULATORS.... Mount up!

We need a fiscal Nate Dogg and Warren G to take control of these wild days on the Street.* But this time they need to be on Wall Street, not 21 and Lewis.

I have to admit to feeling a kind of sick glee watching the coverage of Lehman's demise this week, and I'm not alone. Wall Street observers are saying this is a necessary step in realizing the full depth of the financial crisis.

Of course, the glee is unfounded, right? Isn't it terribly naive to feel this way, since this crisis is going to rattle the economy thoroughly, and eventually directly affect me, along with everyone else?

The thing is, the Lehman disintegration is just a symptom of a crisis that has been brewing for much longer, so the glee is more about the depth of the crisis coming to light, and not about all the lost money.

Also, while I feel sorry for anyone who lost jobs or big money in the last few days, this is something of a case of the chickens coming home to roost. Long before summer 2007, I heard stories of people piling into houses in poor neighborhoods to try to pay their way out of subprime mortgages and keep their homes. Meanwhile, the hot housing profits in the credit markets were built on the use of these mortgages and the derivative schemes that made them seem viable. The geniuses in private equity who came up with these ideas operated outside the constraints and oversight of regulation -- I guess because the government trusted them, as rich people (rich=competent and good, right?) and because no one fully understood the mechanisms they were using. Now, the house of cards has collapsed.

It goes without saying, at this point: These capital markets need regulation, just like any market where greed can trump prudence. Which is probably any market under the sun.

So as soon as the bailouts and bankruptcies blow over, we need action from lawmakers, preferably under the guidance of a president who is not an idiot.

Regulators, mount up.

*In case you lived in a cave in the early 90s, Warren G and Nate Dogg sang the hugely popular 1994 hit, "Regulate", in which Nate Dogg describes saving his friend from muggers -- "regulating" -- on the streets of Long Beach.