For many of you, August is the last chance to squeeze in a vacation before the onslaught of the fall, which this year will be fairly eventful on many fronts. We face a watershed presidential election, a global financial meltdown and widespread corruption in the financial services industry. So, before you leave for vacation, let’s review the landscape.
At the top of most lists will be the presidential race and the battles for the control of Congress and the Senate. If even half of the rhetoric is to be believed, the results of the November federal elections will have a major impact on the regulatory front. My guess is that certain matters such as the reform of over-the-counter (OTC) derivatives trading and the push for a Legal Entity Identifier (LEI) standard will withstand a backlash from the GOP if it wins the White House and the Senate. These reforms are pretty far along and stopping them would mean a lot of time and effort will be wasted. It’s also likely that these positive changes would have happened organically but the horrors of the Great Recession hastened their development. As for other Dodd-Frank initiatives, I expect the Republicans will pick their battles and cast a lull over implementing other aspects of Dodd-Frank. They will have other fish to fry.
Yet even as the politicians in Washington sharpen their swords and knives, the Congressional Budget Office this week is predicting in very clear terms that the U.S. economy would crumble again into a “significant recession” in 2013 if Congress fails to compromise and sidestep tax increases and spending cuts that automatically kick in during January. If that isn’t enough to scare people into drinking heavily, all we have to do is look to Europe and its ever-present sovereign debt crisis. A fiasco is looming like a proverbial 800-pound gorilla in the room that everyone is ignoring. We know that if most of Europe’s economies take a dive, so will we.
Of course, while all of the aforementioned is underway, we appear to be having weekly, major scandals involving A-List institutions and firms. Many of the unwashed masses who never heard of “Libor” before are learning how they have been systemically ripped off by once reputable firms. It’s as if nobody bothered to learn anything from the Great Recession, least of all those who caused it. Maybe charcoal gray, pinstripe Brooks Brother suits should replace those tasteful orange uniforms often donned during incarceration? Perhaps someone should consult with Martha Stewart on this?
But I don’t want to spoil your much-needed lull before Armageddon hits. I strongly suggest lots of rest, libations that stagger the mind (to quote the great Steely Dan), and many, many hours with loved ones who have missed you very much over the past year. The horrors that await us are beyond our control. The best you can do is take charge of those things you can control and be prepared as much as humanly possible for what’s next. And remember to treasure all the good times you’ve had and keep in mind that despite the gloom and doom there are better days ahead for most of us.
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