The Glass-Steagall Act of 1933 prevented the consolidation of banks, securities firms and insurance companies. That ended in 1999 when President Bill Clinton signed the Financial Services Modernization Act into law.
FSMA introduced a huge conflict of interest between Wall Street and Main Street by providing financial incentives to investment analysts to issue optimistic research reports in order to get the highly profitable investment banking business. One analyst stated that his three most important goals were: 1. Get more investment banking revenue, 2. Get more investment banking revenue and 3. Get more investment banking revenue.
Wall Street investment analyst reports are more an exercise in marketing than they are objective evaluations. They are not even worth reading for amusement as some financial reporting is, such as forecasts, for example.
Fortunately, there is one company that provides reliable, objective investment analysis in addition to many other services. We are talking about Morningstar Inc. here.You need to login to view the rest of the content. Please Login. Not a Member? You can now sign up for a one-month free trial membership. Join Us