Here we are in November already, well past the first-year anniversary of the Panic of 2008, and any heat, not to mention action, on financial reform has been reduced to a slow sauté from a flame more suited to stir-fry.  The debate on whether some companies are too big to fail has just kind of gone poof.

This should surprise no one for a number of reasons.  For one, who do you think owns the Representatives and Senators that would have to craft legislation to rein in these trillion-dollar monsters?  Sorry, ladies and gentlemen of Capitol Hill, but we just don’t feel like putting on the bridle today or any time soon.

For another, the financial meltdown had its 15 minutes of fame. In the entertainment world that is the U.S. in 2009, it’s time to move on.  There’s Kate and Jon, Jen and John, Brangelina, etc., etc. to compete for the limited attention span of most people.

Sure, Goldman releases blowout earnings for the third quarter and outrage bubbles for a moment. But then like bubbles do, the outrage bursts.  And we’re back to Kate and Jon…

I have very little faith in the ability of Congress to summon up the courage to do what is necessary in the case of those companies whose collapse might endanger the financial system; in other words, companies too big to fail.

Some enterprising capitalists might want to think about starting a business called ‘Cojones For Rent’ and seeing what kind of business they could drum up from our legislators.

Or, we could take a page from the book being written by European regulators who don’t seem to be shy about cracking the whip when necessary.

The European Commission indeed did just that last week when it forced ING to divide itself in half.  ING is a worldwide banking and insurance giant.  Its properties are well-known and in the U.S. at least, its insurance units are well-respected.

The problem is that ING sank a ton of funds into investments that went south, including bad mortgages, and had to go to the Dutch government for a 10 billion euro bailout and guarantees for toxic mortgage assets that were in the range of 20 billion euros.  This year that particular bird came home to roost, with the EU demanding that ING get smaller and divest itself of some operations in order to repay the loan.

The plan that ING announced is that it will sell its U.S. insurance operations and its online banking company, thus raising some of the money to start repaying the government. 

The rationale behind the EU’s demand was that the company had to reduce its exposure to risk.  There was also the feeling that the Dutch government had perhaps treated ING too lightly and thus gave it a competitive advantage over troubled companies whose governments did not treat them quite so well.

Contrast that with the kid-glove treatment that has been accorded Goldman, Sachs and JPMorgan Chase, among others.  They repaid the TARP funds to the U.S. government and now it’s back to business as usual.  In fact, business is better than ever since everybody now knows the government won’t let these companies go down.

I know we hate to think that Europe has anything to offer us or can do anything better than we can. But considering what they’ve done in regard to ING, I think it’s worth inquiring whether the EU has some cojones for rent.

Hold on to your wallets, folks. 

The stock market has been on a winning streak and Wall Street is starting to feel its oats once again.  Yes, you guessed it, those same people who brought us the biggest mess since the Depression because they convinced us that markets could defy gravity are again banging the drum with the message that the seeds of a recovery are starting to bloom.

Really? 

At this point the level of skepticism about anything Wall Street says should be so high that any positive remark sets off Geiger-counter-like beeping. Wall Streeters made tons of money after all by getting the maximum number of suckers to buy into the deals and bargains and can’t-lose situations they created, many times out of bubble soap.

They’re paid to highlight the seams of gold among the dross, no matter how much dross there is.   Need I tell you that dross is everywhere and any gold to be found is fool’s gold?

And when things go bust, well, that’s equities for you.  Seems there really was some risk involved after all.

As for the recovery, I know it doesn’t serve their purpose, but I suggest anyway that these financial wizards leave their towers and see what’s happening on the ground.  Down here, the recovery isn’t around the corner.  It hasn’t even gotten into town.

Agents and insurance companies know it; retailers know it; newspapers and magazines know it; manufacturers of goods and services of every stripe know it.  Things are terrible.  And if they’re not getting worse, they’re hardly getting better.  People all over are scared for their jobs and until that fear is allayed and the job market starts to come back, nothing much is going to change.  Here on the ground.  

There’s a good reason for the old adage “once bitten, twice shy.”  The collective ouch that our finances have experienced as a result of getting bitten should give us pause about getting close to this particular dog again.  Even if the dog is wagging its tail.

Caveat emptor.