Serious as the economic times may be, it’s difficult not to laugh at the apparent bewilderment of some:

A year after the financial system nearly collapsed, the nation’s biggest banks are bigger and regaining their appetite for risk.
Goldman Sachs, JPMorgan Chase and others — which have received tens of billions of dollars in federal aid — are once more betting big on bonds, commodities and exotic financial products, trading that nearly stopped during the financial crisis.
That Wall Street is making money again in essentially the same ways that thrust the banking system into chaos last fall is reason for concern on several levels, financial analysts and government officials say.

From my distance well beyond the halls of Wall Street and of Washington, it seems to me that the biggest banks must now realize that they are truly TBTFs (too-big-to-fails) with just about explicit government backing. Why not take risks? The remuneration flows to the individuals, and then Big Pappa Government has his hand hovering on the back of the banana seat to right the wobbles. Says Larry Summers, director of the White House National Economic Council:

You cannot rely on the scars of past crises to ensure against practices that will lead to future crises.

And neither can you rely upon government regulations, because the giants of industry are smarter than the snivelers of bureaucracy. Only the ambitions of smaller giants will put a long-term check on their behavior.