Milestone for many

This morning President Obama signed into law the financial overhaul bill that has been debated for almost his entire Presidency.  This marks a milestone for many.

First, the investing public finally gets protections that are essential.  With these protections in place the faith of the individual investor can begin to be restored.  While it may not consciously affect individual investors immediately, this is critical in the long-run for the health of the financial markets.

Second, regulators finally get tools that will allow them to do their job.  Notice I said job, singular.  The sole job is to provide a trading environment that is equitable for all participants.  That equanimity requires many things, but transparency is one of them.  Now regulators have almost full transparency.  Again, this is a good thing.

Third, financial institutions have many new rules and some new regulators to which they are accountable.  There will be a lot of bellyaching about a reduction in profitability and about the choking off of liquidity in capital markets and…and…and a lot more probably.  However, the financial industry is super competitive and they will still find a way to make money in the long run.  They will also still find a way of financing U.S. and worldwide capitalist undertakings.  What is different is that the playing field has been leveled vis-a-vis the little guy and her regulatory protectors.  Again, this is a good thing.

Fourth, I began the blog specifically calling for many of the changes that this bill puts into place.  So for me personally it represents a milestone.  I am very pleased to see that the final bill contains many essential changes.  Changes that during my career as a portfolio manager I felt were essential for the long-term viability of the sanctity of the financial markets.  Yea!

I feel Congress has done the right thing.  I feel that this piece of legislation will actually be a huge part of Obama’s legacy.  Nice job all!

Jason