And who can disagree?

Well, pretty much everyone who matters in our political leadership. There’s no stomach whatever for really taking on the big banks, either through forced downsizing or, as Paul Krugman would have it, tougher regulation aimed at making financial services more like the boring, profitable, plain vanilla sector it was from 1945-1980.

What we’ll get is a bit more regulation, a bit more “resolution authority” to wind up big domestic banks that get in trouble, and, as Johnson points out, absolutely nothing on the far more important issue of reining in cross-border banking. The banks will continue along their merry way until the next big bubble bursts.

Nobody in Congress likes what Wall Street has done, but everyone in Congress likes Wall Street money. So what matters in an election year is to be seen to be doing something, but not too much.

That’s why the Know Nothings, having realized a bit too late that there’s no political advantage to be had from defending the banksters, will go along with some sort of bill, and the President, thrilled at last to have some bipartisanship, will make sure the bill is watered down sufficiently as to be meaningless.

Gorilla says: “Wall Street is selling CDOs on the spoons we still haven’t hidden!”

Paul Krugman also has a useful note on the Spanish problem.

The more or less solvent Northern Europeans (Germany and the Netherlands) once again are faced with having to bail out the so-called PIIGS (Portugal, Ireland, Italy, Greece, and Spain).

Johnson’s great fear is a speculative attack on the Euro, followed by a cataclysmic event like the Germans or Greeks leaving the Eurozone.

He believes the banks there, and the banks here, are too weak to stem the inevitable losses that will come.

Krugman sees the Spanish difficulty as emblematic of a currency union that’s not working.

The US, as usual, seems to be in cloud cuckooland, fantasizing that more robust growth is just around the corner.

Consumer and business demand say this is utter nonsense.

Will our undercapitalized banks be back at Uncle Sam’s trough if the dollar carry trade suddenly goes the other way?

Gorilla’s only slightly more optimistic: “Simon says, and Brussels pays!”