In Speaking with the New York State Society of CPAs
Posted by Larry Doyle on May 19, 2009 12:22 PM |
My presentation was well received. I addressed a number of issues, including the current state of the economy, debt levels, banks, the Uncle Sam economy, regulation, and my outlook.
A number of individuals offered how they were not fully aware of the potential losses within the Federal Home Loan Banks along with ongoing losses at Freddie and Fannie (LD: death by a thousand cuts at all of these institutions). Another individual questioned how the Federal Reserve can continue to buy up MBS at these rate levels without assuming real long term risks in the process (LD: they can’t). Other questions addressed issues within the commercial real estate space (LD: a buyer’s market which will get cheaper) and the potential success of the TALF and PPIP (LD: moderate success at best, with some managers making huge returns on certain deals). It was an engaging dialogue and I thoroughly enjoyed it.
My greatest takeaway revolved around the disappointment within the audience on the regulatory front. A number of individuals anticipated an increase in demand for accounting services consistent with real regulatory changes. As with any industry connected to finance, accounting has lost a number of jobs. The expectation of increased opportunities given new and stronger regulations were highly anticipated. Regrettably the message from Washington as asserted by a society spokesman is that in regard to regulatory changes “the pedal is off the metal.”
Given the very nature of their job, other CFOs in the audience also voiced their disappointment with that development. One CFO went so far as to inquire where the “profiles in courage” are today in our government and regulatory bodies.
It would appear that both Wall Street and Washington seem more focused on cosmetic changes without tackling the hard issues. Our markets will ultimately price the subsequent risks accordingly.