Toothpaste

“The lights are going out all over Europe: we shall not see them lit again in our lifetime.”

So spoke Sir Edward Gray , British Foreign Secretary during the run-up to World War I. He recognized then that Germany’s aggression and England’s response would radically change the European continent.

I was thinking about this while watching the global financial architecture unravel. As banks, brokers, and insurance companies have failed, the world’s financial lights have been going out.

We’re now facing a significant re-making of our financial system. The Treasury’s ownership stake in over half the U.S. banking system will change the way finance works. There will be more controls and regulations and less innovation.

Some have wondered if this is really necessary. But you can’t put toothpaste back into the tube. The dramatic events of the past month will result in new regulations. For good or ill, the landscape is changing.

Douglas R. Tengdin, CFA
Chief Investment Officer
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