Unless something major happens in the next three months, the first Tuesday in November won't be "much fun for Democrats," according to former New Jersey Gov. Jon Corzine.

"People wanted change in 2008 and they want change in 2010. Some of my friends in New Jersey wanted change in 2009," he joked, referring to his own loss in last year's race for New Jersey governor. Speaking at Financial Advisor and Private Wealth magazines' first annual Innovative Alternative Strategies conference in Chicago on July 28, Corzine touched upon a wide variety of subjects, ranging from politics to financial regulatory reform to the global economy.

Regarding the November election, Corzine thinks the Republicans are likely to emerge with a slim majority of four to six seats in the House. While conceding he is no political bookmaker, he suspects the Democrats will retain a razor-thin majority in the Senate and lose six or maybe seven Senate seats, with majority leader Harry Reid's seat being a wild card.

And that potential change reflects the overall angst now prevailing across the country. "Things are about as uneasy as they've been in my adult life," he observed. "A lot of people on Main Street got hurt" by the financial crisis.

If the election turns into a total rout like the Democratic victories in 1974 in the Watergate aftermath, he thinks the GOP could capture another four Senate seats and take over that chamber as well. But he doesn't see that happening.

Even if his scenario doesn't play out, the next Congress is likely to be far more centrist due to a combination of "Bluedog Democrats" and more Republicans. If that's the case, Corzine said it's possible the Bush tax cuts could be extended for six months while legislators scope out a new tax structure.

Corzine pronounced himself "a big fan" of President Obama, but with one serious criticism: Overloaded with wonks and academics, the administration "needs more people who know how the real world works."

The degree of interconnectivity between the financial and economic systems is much deeper than it was when Corzine stepped down as CEO of Goldman Sachs in 1999 to successfully run for a U.S. Senate seat from New Jersey. Like Alan Greenspan and others who are intimately familiar with how the financial system works, he admiited he was caught off guard by the alacrity with which panic raced through the global financial system in the fall of 2008.

So it's no surprise that politicians aren't the only folks who are unpopular these days. As Corzine dryly noted, Goldman Sachs' approval ratings are "about 15 basis points below BP's."

On balance, Corzine, who became CEO of MF Global earlier this year, views financial regulatory reform as a net positive. He cited the provision that all regulators will have to sit on an oversight board rather than compete on behalf of their territorial fiefdoms as a serious improvement.

"As much as you may not like [financial re-regulation], the cost of doing nothing is much higher," he said. "All the self-correcting mechanisms in the [old] system didn't play out like they were supposed to in theory."

Clients of financial advisors could be major beneficiaries of financial reform. All the high net worth people who are not classified as "too big to fail" will benefit in a major way, he believes.

If profit margins in some parts of the financial services narrow, it will be offset by an increase in stability. Capital formation is best executed in a stable environment, he noted.

When it comes to the economy, Corzine is a contrarian. "Change is afoot everywhere" and that means great opportunities, he said. Financial advisors are likely to have a more important place as "risk intermediaries" going forward. The amount of risk in the system "has shrunk" but others will try to fill the void.

Corzine thinks all the fretting about what some see as the outsized position of financial services in the U.S. is misplaced. If it's 9% of GDP, that's because America is a world leader in the business with lots to offer foreign economies. Ditto for technology.

And as painful as the recession was, some positive trends are emerging as the economy struggles to recover. "Dividend yields on stocks are 2% or 3% above Treasuries," he said, adding that manufacturing is growing and Americans are saving for the first time in a long time.

Accelerating globalization may be spawning dislocations in many folks' lives, but more people have come out of poverty in the last 25 years than ever before, Corzine said. America should remain the world's dominant economic power, and the rise of China, India and Brazil and others should create new markets for American businesses.

However, Corzine didn't mince words about the depths of problems facing state and municipal entities. He told advisors to be "very careful" about investing in their debt.

Probably his most surprising prediction was that municipal workers' pensions would have to be nationalized. The trend toward reducing benefits for newer government employees and forcing them to contribute more of their own funds won't be sufficient, he said.

It's hard to imagine the U.S. Congress would cotton to taking on those liabilities. But Corzine says that problem will really start to snowball 10 to 15 years down the road, and that the problem will have to be addressed.