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We need to see banksters in orange jumpsuits doing the perp walk

That's what it will take to restore confidence:

Charles Geisst, a finance professor at Manhattan College who has written 18 books on the history of markets, says investors balked at buying for years after the Crash of 1929 and Black Monday in 1987. The view both times: The odds are stacked against the little guy.

To combat such an impression, the Securities and Exchange Commission was established in 1934, and "circuit breakers" were instituted after the 1987 crash to stop massive selling. But all of the safeguards don't seem to be helping lately.

"If the stock markets had any reputation for integrity, they lost it in the past year," Geisst says.

Restoring small investors' confidence may depend on whether they see ample evidence that federal regulators are successfully cracking down on bad behavior, says Ross B. Intelisano, a securities fraud attorney with the firm Rich & Intelisano.

Who cares about the small investor?

They're only peasants anyhow! Better to loot their pensions and steal their houses.

UPDATE As Yves points out:

This episode is a sad reminder that we only have the form of government in the name of the collective interest in the US. The dirty laundry of the banking industry and its enablers among the powers that be is treated as a state secret, on the same level as military intelligence. Dubious rationales like “trade secrets, personnel rules and practices, memos subject to attorney-client privilege and violations of personal privacy” are served up as excuses for failures to provide citizens with disclosures they fully deserve.

Until the public faces up to the ugly changes that have taken place, we will remain in their thrall. From the close of ECONNED:

That brings us to a final outcome of this debacle. A radical campaign to reshape popular opinion recognized the seductive potential of the appealing phrase “free markets.” Powerful business interests, largely captive regulators and officials, and a lapdog media took up this amorphous, malleable idea and made it a Trojan horse for a three-decade-long campaign to tear down the rules that constrained the finance sector. The result has been a massive transfer of wealth, with its centerpiece the greatest theft from the public purse in history. This campaign has been far too consistent and calculated to brand it with the traditional label, “spin”. This manipulation of public perception can only be called propaganda. Only when we, the public, are able to call the underlying realities by their proper names — extortion, capture, looting, propaganda — can we begin to root them out.

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