President Barack Obama meets with former Federal Reserve chairman and current Economic Recovery Advisory Board chair Paul Volcker in the Oval Office, January 21, 2010.

The US administration's interventions in the market will not solve problems and will bring about unintended consequences, Marc Faber, author and publisher of the "Gloom, Boom & Doom Report," told CNBC Friday.

President Barack Obama on Thursday proposed new limits on the size and trading practices of big banks, to prevent excessive risk-taking.

"I don't have a very high opinion of Mr. Obama," Faber told "Squawk Box Europe." "I was negative of Mr. Bush but I think Mr. Obama makes him look like a genius."

"Basically I think everybody will agree that in an economic system the market solves problems best."

Maybe or maybe not.

As Irish writer George Bernard Shaw remarked about Christianity, it might be a good thing if anyone ever tried it. 

President Barack Obama proposed new limits on the size and activities of America's largest banks, on Thursday hit bank stocks as the President in the aftermath of the loss of Edward Kennedy's US Senate seat to a Republican prompted a tougher line on Wall Street.

With former Federal Reserve Chairman Paul Volcker, who had advocated more aggressive regulatory proposals, at his side, President Obama said he wanted to toughen existing limits on the size of financial firms and force them to choose between the protection of the government's safety net and the often-lucrative business of trading for their own accounts or owning hedge funds or private-equity funds.

He said the new provisions would be known as the "Volcker rule."

"Never again will the American taxpayer be held hostage by a bank that is too big to fail," Obama said.

"If people are focused on things that caused or were real contributors to the financial crisis, it wasn't trading,"said David Viniar, chief financial officer at Goldman Sachs.

In a related development on Thursday, the Supreme Court voted for money politics and gave new power to lobbyists by allowing interest groups - -  corporates, unions and others  - - to spend unlimited sums explicitly advertising against a candidate's re-election.

“We have got a million we can spend advertising for you or against you - -  whichever one you want,’ ” a lobbyist can tell lawmakers, said Lawrence M. Noble, a lawyer at Skadden Arps in Washington and former general counsel of the Federal Election Commission.

The decision seeks to let voters choose for themselves among a multitude of voices and ideas when they go to the polls, but it will also increase the power of organised interest groups at the expense of candidates and political parties.

Will the President's proposal on restricting big banks on trading activities break financials? Insight with Mark Matson, Matson Money; Alan Lancz and Alison Deans:

Prof. Peter Morici of the University of Maryland, commented: Obama Disappoints on Bank Reform:"President Obama announced he wants to prohibit banks from forming hedge funds, private equity funds and trading securities on their own accounts, and he wants to limit the size of banks and financial institutions generally.

Hedge funds, private equity funds and proprietary securities trading did not cause the banks to get into trouble, and the size of banks did not cause the credit crisis.

Banks, small and large, failed or required bailouts because of poorly considered loans, and the kinds of engineered products that were created from those loans by non-bank entities.

Collateralized debt obligations and swaps created and marketed by non-bank financial institutions, such as Lehman Brothers and Goldman Sachs, compounded the errors of foolish bankers. Later, Goldman Sachs and other financial institutions became banks to access inexpensive credit from the Federal Reserve, but those decisions could be reversed if bank holding companies are not permitted to trade on their own accounts.

Prohibiting securities trading by banks and limiting the size of the banks would not keep those mistakes from happening again.

Many smaller banks invested in risky securities—commercial mortgage backed securities. They did that and could do it again without a proprietary trading arm.

Large banks failed or required bailouts, because they continued to hold residential mortgages, residential mortgage back securities and credit card and auto loans that soured. Bad loans will sink a bank, regardless of whether it is owned by a holding company that trades securities on its own account.

The President’s statement on bank policy does not demonstrate a clear understanding of the causes of the credit crisis, and more importantly, it does not chart a clear path to reforms that would keep another crisis from occurring.

The President’s statement appears intended to distract public attention from record profits
and bonuses on Wall Street, and from his political troubles.

Coming on the heels of news that 450,000 Americans continue to file for first time unemployment benefits each week, and the Democrats loss of a special senatorial election in Massachusetts, the President’s Obama’s statement on bank reform appears political and disingenuous.

One year after taking office, the Administration should demonstrate a better understanding of the causes of economic crisis and articulate confident solutions for unemployment.

The Obama team simply does not have a grasp on the nation’s economic problems."

Euro's weakness against sterling badly needed fillip for exporters selling into UK

Davy chief economist, Rossa White, commented today: "Yesterday's export data spelled out the hit to goods exports from the strength of the euro against sterling in the first ten months of 2009. Visible exports to the UK fell 17% year-on-year (no data on services are yet available). But in the last six weeks, weakness of the euro against sterling (thank you Greece!), allied to the expiration of the cut in UK VAT rates, has provided a much-needed fillip to indigenous exporters. Let's hope the trend extends further.

It is worth making the point that the UK's importance as an export destination is somewhat exaggerated. In 2008, only 18.5% of Irish goods exports (it is a similar share for services) was destined for the UK (including Northern Ireland). That share fell to 15.7% in the period January-October 2009 as Irish exports to the UK slipped by €2.2bn year-on-year. Note that the rest of Irish goods exports were actually up 2% in value year-on-year in the same period: the negative UK trend meant that the total fell by 1.5%. Of course, many manufacturers compete with UK imports in the domestic market as well as servicing British consumers.

The strength of the euro has to be balanced by the acknowledgment that it has reduced import prices (about one-third of our consumer goods imports are sourced from the UK). That deflation has underpinned Irish real incomes at a time when nominal incomes were under pressure. But currency appreciation against sterling is undesirable on net. So the recent effective 7% competitive boost (FX and VAT) is welcome. In the short term, sterling may not move much further in Ireland's favour. But longer term, estimates of fair PPP value between 0.70-0.80 mean that exporters will at some point enjoy greater breathing space."

The Dow fell 213 points or 2.01% to 10,390 Thursday.

After Wednesday's 122 point dip, the Dow is down 3.1% in two days and off 0.4% for 2010.

The Nasdaq dipped 1.12% and the S&P 500 dipped 1.89%.

Asia

The MSCI Asia Pacific Index fell 1.4% Friday.

The Nikkei fell 2.56% and China's Shanghai Composite declined 2.71%.