I have travelled to multiple client events over the last few months and been privileged to be able to talk to advisors and their clients. While a significant majority of those I spoke to are suspicious or outright contemptuous of our political leadership, they maintain a clear hope that our political leadership will find a solution to the fiscal cliff. Very few have a sense of where compromise can be achieved and who will emerge as leaders capable of bridging the political gap. I have written and spoken many times about the “The Moment of Truth”: The Report of the Commission on Fiscal Responsibility and Reform (more commonly referred to as Simpson–Bowles after its co-chairs). I strongly support many of the general principles of this report but simply wish to restate some comments from the opening preamble:

“Together, we have reached these unavoidable conclusions: The problem is real. The solution will be painful. There is no easy way out. Everything must be on the table. And Washington must lead. —- We do not pretend to have all the answers. We offer our plan as the starting point for a serious national conversation in which every citizen has an interest and all should have a say. Our leaders have a responsibility to level with Americans about the choices we face, and to enlist the ingenuity and determination of the American people in rising to the challenge.

We believe neither party can fix this problem on its own, and both parties have a responsibility to do their part.”

While I share the hope that many of the advisors and their clients have voiced in recent weeks, I am fearful for the markets. Recent market volatility is not because, individually, the President was re-elected or the Republicans retained control of the House of Representatives. The mounting concern is that after the most expensive election in history, collectively, we have a stalemate. The only reason we are rolling down a hill in a car with poor fiscal brakes toward the cliff is that politicians were unable to make a compromise after the “Moment of Truth” was published.

Hope is NOT a plan. We must have a plan very soon or risk significantly more volatility in financial markets. The plan MUST be definitive, the time for vague concepts and promises of future action is long gone. We are not Japan; we have better demographics and we “only” have approximately 100% debt to gross domestic product (GDP) — but time is running out.

In the words of Senator Tom Coburn: “We keep kicking the can down the road, and splashing the soup all over our grandchildren. Every modest sacrifice we refuse to make today only forces far greater sacrifices of hope and opportunity upon the next generation.”

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