You are quite right about the unwinding difficulty, but the good thing is that money talks but it also listens. Market participants are often quick to respond to changed conditions--in fact, they try to anticipate them as best they can.
I have even heard some say that they don't care what the system is, as long as they know what it is, and that it's not arbitrary. They want stability, and not uncertainty.
There will be some upcoming uncertainty, that is for sure--but if action is swift, decisive, and uncomplicated, markets will be quick to respond.
I don't expect a shift to a market controlled by fundamentals, but again a swinging of the pendulum back to a more balanced state of affairs.
One of the important items on the list is repatriation of foreign profits, which is itself a process that will need to be managed in order to smooth out its effects.
In a way, it is time that people paid a price for their stupidity, their sloth, and their greed. Look at these pensions funds working on 7-8% assumptions going forward. Future beneficiaries were all too eager to accept the projections. Blame lies everywhere, and pain should lie everywhere.
There will be some degree of rationalization, of that I am sure--however, it won't be complete. Reinstatement of Glass-Steagall remains a lofty but worthwhile goal, and may be a bellweather going forward.
A big issue is that there are so many places that need work, and there are all intertwined: tax reform, public-sector pension reform, banking reform, entitlements reform, etc. The system is absolutely huge, and identifying points of attack and future paths is of critical importance.
Much work lies ahead.
Nice to hear you are doing well! I see this thread has really derailed.