Are you excited about (prepared for) the changes ahead?

To be honest, I am indeed very excited about how things will work out in the next 18 months. The circumstances surrounding the global financial markets are indeed worriesome for many and fearful for some. Also, this wave of bank failures will consequently have its effects on businesses and also on consumers like you and I.

I've always marvelled at the availability of the credit markets, which allow for many consumers (and more so for companies) to purchase more than they could afford at the time of the purchases. Also, it provided companies and businesses to go about their day-to-day activities. Additionally, with the credit markets, it also allowed companies to do more businesses than they could otherwise.

Just take for instance, not everyone can purchase an automobile and pay off for it in cash at the time of purchase (whether it makes financial sense even if one can afford to its another matter altogether). So, imagine without credit markets (like in China until only some time back), anyone who wants to buy one will either have to save up until he can afford one or dismiss the idea altogether.

With that, everyone suffers, in the sense that automobile companies will see slow sales and the consumers would not able to afford one until much later. Which is why, with any emerging economy, the financial industry is a good barometer of the economy (and also a good instrument for exponential growth). Of course, there is good credit and there is bad credit. Both consumers and the lenders must abide by certain sound principles or the situation can grow ugly, like it is now.

Against this backdrop, though we cannot be sure if McCain or Obama will be the one cleaning up this mess, we can be certain that the financial market will change significantly after this saga. How it will change is anybody's guess. But change it will be. Maybe it is coincidental, or maybe these guys have great foresight. The Obama-Biden duo certainly led the wave for the need to change.

Of course, given the brief description about the instrumental role financial institutions play in an emerging economy, or for that matter, any economy; this financial meltdown will have not only a multiplier effect on the economies, it will also have many spillover effects on other areas as well. In other words, not only will businesses be affected, the way regulators perform their roles will also be very different. In fact, it will have such huge impact on every single person or entity that deals with a financial institution.

I don't know about you, but everyone I know has dealings with financial institutions, be it a big or small way. As such, if there are changes in the ways financial institutions operates, it will definitely affect you and me, it's no longer a question of 'if', but 'how' or 'how much'. To add a different perspective, after this saga, the way people perceive financial institutions will also change. As there may be those who suffered loses or had their suspicions confirmed. Either way, there will be an impact, where magnitude is the only question.

So, why am I excited? In this new environment, economic rules will change. And chances are, when these rules change, those not aware (or refuse to acknowledge it) of what these new rules are will see themselves falling behind. Its not a question of what can the government do, but what can you and I do in this new economy, to take charge of this situation. And with these new rules, it will take not only a new mind-set or paradigm; but also a new skill-set and tool-set.

Its like you were invited to a game of tennis, and you know the rules well. You've been in competition and won some important games. So, you arrive at the court with your gear and shoes. But when the game got underway, suddenly your opponent is playing tennis but not by hitting the ball with a racquet but kicking it with his feet. Instead, he is using the rules of football in this game called 'tennis'. Of course, you can revolt and walk out of the game, saying to yourself, I don't believe this! And the next time you go to a tennis match, you see that's how people play 'tennis' now! And those people who were once good are now struggling (that is if they still choose to play). Those that are excelling in the game are those who are adaptable, they are able to understand 'tennis' using rules from 'football'. And they have also picked up new skills such as how to kick the tennis balls. Also, they have changed their shoes to give them better power, precision, and speed.

This is exactly what will happen when the dust settle, and the new rules are being spelt out for the 'new economy'. And the bellwethers of this 'new economy' will become 'leaders' when they understand these new rules and choose to adopt a different mind-set, acquire a different skill-set, and use a different tool-set. What specifically these three 'sets' are, will be the subject of yet another discussion.