Wall Street's self-diagnosis: We're all fine.

Never look back

    Finally, we come to Keith Horowitz of Citi Investment Research. In his own 49-page treatise, Horowitz reveals a paradoxically lax perspective emanating from investors in financial firms who were surely burned themselves by the likes of Bear, Citi (C, Fortune 500), Lehman, Merrill, and others. Indeed, a survey of the attendees at Citi's unintentionally humorously named "Beyond the Basics" conference -- shouldn't all these people stay focused on the basics for just a little while more? -- revealed that investors in these kinds of firms don't care about the past. What they want, and they want them unfettered, are firms that swing for the fences.

    When asked what they were most concerned about right now, a full 43% answered regulatory reform. The closest issue of concern, at just over half that, was the euro debt crisis, at 24%, followed by the U.S. economy at 21%. Is reform really something to be "concerned" about? We wouldn't have thought so, but we would have thought wrong.

    And the answer to the question, "Which large cap stock will provide the best return over the next 12 months?" Drum roll, please. Goldman Sachs (GS, Fortune 500). (Quelle surprise!) On the one hand, that makes total sense, given the pummeling the stock has taken in recent weeks. Recent controversy aside, though, it still shows that investors want the big score, and not the recently proven slow-and-steady-wins-the-race style of either Wells Fargo (WFC, Fortune 500) (just 5%!) or JPMorgan Chase (11%).

    Horowitz also offers up the best he-said-it-with-a-straight-face remark of the week. "One negative of the current reform bill is its higher than average level of rule specificity," he wrote, "which gives regulators less leeway for interpretation in enforcement."

    To that, we can only respond with a straight face of our own: Negative for whom?