Billionaire investor George Soros believes the current financial crisis is the worst since the Great Depression, and said stocks have not bottomed yet, Bloomberg News reported Thursday.

Soros said the most recent market bottom "will probably not prove to be the final bottom," adding that the current stock rebound will last six weeks to three months as the United States moves closer to recession, Bloomberg News reported.

Further, Soros, in an op-editorial column in The Financial Times, argued that the cause of the market's current problems is a flawed premise: the belief that markets are self-correcting and tend toward equilibrium. They aren't and don't, Soros argues, and the laissez-faire policy creates bubbles, including the most-recent housing bubble, which, in turn, when it started to burst, led to the current credit crunch.

Soros cites deregulation

Soros added that the market's current troubles originated in 1980 when U.S. President Ronald Reagan and United Kingdom Prime Minister Margaret Thatcher led a laissez-faire movement that reduced/eliminated regulation of banks and financial markets, the FT reported.

Another day, more worries about Google (NASDAQ: GOOG)'s growing global power. The internet advertising juggernaut has so much influence over the spread of information (and the advertising dollars that come along with that) that it's hard to see just how powerful the company has become in just the last three years alone.

So here we are in 2008, and -- again -- government regulators are growing more concerned about the power Google has. In a capitalist society, where does the free market end and the power of government begin? That's a formula nobody can answer. When the U.S. government made its case against Microsoft (NASDAQ: MSFT) a decade ago, it included pieces of how the company trampled on its competitors using illegal tactics. I've never agreed with the Internet Explorer part of that litigation and never will -- since, after all, consumers are free to download any free web browser they please. Is the growing government concern over Google's growth in the same venue? It shouldn't be.

Is anyone forcing you to use Google every single day? Nope -- it's your choice. Google ascended to the top spot in internet search without distributing a single piece of software to its customers or using any kind of illegal tactics at all. It simply provided the best and most complete experience. Customers recognized that and have made Google the top choice in internet search (and advertising along with it).

Does that require regulation? How absurd. It's true that Google could provide privacy details (and much more) to each customer at regular intervals -- but if it screws up, users will leave Google. But, when a company that does so much right for its consumers grows large because of that fact, competitors turn to any tactic they can to try and stem the flood. Making a better product, in the free enterprise tradition, would seem a better tactic.

As the SEC considers a proposal to raise the minimum liquid net worth for hedge fund investors from $1 million to $2.5 million, the agency is receiving hundreds of letters (WSJ, subscription required) from individual investors. Many of these experts make excellent arguments for why, if anything, the net worth thresholds should be raised. Here are some of the best arguments: One of them asked why small investors should be restricted from hedge funds, but not speculative Pink Sheets stocks? Another summed up the laissez-faire argument pretty succinctly: "Stay out of my wallet, stop trying to protect me from myself, stop presuming to know more than I do about my own life, risk-tolerance, and financial sophistication."

The problem with hedge funds is that it makes very little sense to regulate them in such a sweeping, unilateral way. Why should a conservative fund that specializes in lightly leveraged merger arbitrage or covered calls be regulated the same way as a highly leveraged fund that trades Pokemon card futures? It just doesn't make sense.

But since the whole idea of hedge funds it that they're not regulated, treating each fund differently would require investigation of each one -- which defeats the whole purpose.

Carnegie Mellon University Professor Allan Meltzer has an interesting editorial in this weekend's Wall Street Journal (subscription required). As Congress considers ramping up hedge fund regulation, Meltzer isn't buying it: "... whatever the perceived problem, more regulation is not the answer. It is far better to change some incentives for excessive risk-taking. The old saying is true: Capitalism without failure is like religion without sin. The answer to excessive risk-taking is 'let 'em fail.'"

He makes a compelling case against bailouts of collapsing hedge funds, arguing that these can serve to increase excessive risk-taking.

The recent explosive growth in hedge funds and private equity will lead to some inevitable blow-ups in the years to come, probably starting soon. Just recently, a pair of Bear Stearns (NYSE: BSC) funds collapsed. As the panic sets in, investors and regulators would do well to keep a copy of Meltzer's column close by. Only through painful failure will investors learn the pitfalls of excessive risk.

See also:
Jon Ogg: Bear Stearns' subprime fund implosion -- media hype, or serious meat?
Kevin Kelly: Less talking, more hedging please
Tom Taulli: No June gloom for hedge funds
Zac Bissonnette: Is Bear Stearns in play?

According to an article in the Financial Times, three-quarters of U.S. chief financial officers believe that Sarbanes-Oxley should be repealed. In other news, Paris Hilton does not believe that driving on a suspended license should be illegal.

But seriously, does the fact that CFOs believe that Sarbox should be repealed mean anything? According to the article, "Last month, Financial Executives International, a grouping of treasurers and chief financial officers, found that costs associated with implementing Section 404 had fallen by 23 percent since 2005. But it also found that 78 percent of executives polled in a survey believed that the costs of Sarbox still outweighed the benefits."

It's hard to quantify the benefits of Sarbanes-Oxley, which makes doing a cost-benefit analysis difficult. It's probably impossible to know how many cases of accounting fraud the bill has prevented -- kind of like trying to figure out how many deaths per year are prevented by laws requiring that guns be kept in locked cabinets when children are around.

Still, the CFOs do have a right to complain: Sarbanes-Oxley was passed mainly to restore investor confidence after the collapses of Enron and Worldcom, among others, and it may be more stringent than necessary. The SEC will enact some reforms to the bill to make it more business-friendly, while still keeping the substance in place to protect investors.