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Archive for October, 2010

“Retire Barney”; Sense on Cents Endorses Sean Bielat

Posted by Larry Doyle on October 30th, 2010 9:56 AM |

The Wall Street-Washington incest MUST end.

This coming Tuesday, America has a chance to ring that bell, expose that incest, cleanse the system, and deliver the message loud and clear. The peal of that bell must emanate from the 4th District in the state of Massachusetts.

You do not need to read Sense on Cents to appreciate that many politicians from both sides of the aisle have badly forsaken our nation’s future with misguided and ill-advised policies over the last few decades. Many of these politicians now look to save their skins– if not their souls– by professing a newly found religion with an anti-Wall Street mantel. America, and the residents of the 4th District in Massachusetts, should not be so easily hoodwinked. These politicians, especially Barney Frank, must be held accountable and sent home.

I implore the voters of the 4th District to think long and hard and appreciate that their longstanding elected representative Barney Frank embraced the people and the policies which continue to crush our nation. Which people? What policies? Those which were centered in America’s great financial sinkhole known as Fannie Mae then led by its former CEO Franklin Raines. During my own career on Wall Street, I witnessed Barney’s bear hug of Fannie and Franklin from up close. Do not forget Barney’s desire to ‘roll the dice’ with sub-prime mortgage financing.

Many media outlets will look the other way in holding Barney accountable; I have no interest in that. (more…)

What Will the Fed Do When QE2 Fails to Stimulate Economy?

Posted by Larry Doyle on October 29th, 2010 5:56 AM |

Here we are a full three years into our economic malaise, Uncle Sam has thrown everything and the kitchen sink at the economy yet we have little to no traction in terms of growth and momentum. Will another trillion dollars of liquidity do the trick? Well, while the Fed’s liquidity may move markets, will it move the economy? Don’t bet on it. The Fed and its brethren on Wall Street and in Washington are reluctant to truly level with the American people. How so?

Our nation is experiencing a serious structural change in our economy — not a mere ‘enormous downturn’ in the midst of the business cycle. If our central bankers and government officials were to emphasize this point, it may cause a sharper retrenchment in our current growth but it would likely lead to a quicker rebound. Before we get into why our bankers and their political cronies are reluctant to make this acknowledgement, let’s take the pulse of an array of venture capitalists, money managers, and others who provide the capital to a wide array of companies. What do these individuals think the economic impact of another round of quantitative easing might be? (more…)

Wally Cato Recommends Sense on Cents

Posted by Larry Doyle on October 28th, 2010 5:42 AM |

“Larry is our greatest writer on the economy.”

The Register, the official publication of the International Association of Registered Financial Consultants recently interviewed Forrest Wallace Cato. Who is ‘Wally’ Cato? Well, read on, as Wally is easily the most interesting individual with whom I have ever crossed paths. In fact, I would rate Wally Cato as perhaps one of the single most worldly, well versed, and well connected individuals of the modern era.

You don’t believe me? Read on.

I challenge you to match Wally’s life with that of almost anybody in the world today. Wally is conversant on an exceptionally wide array of topics. I am highlighting an interview with him in the most recent edition of The Register because he speaks at length on the state of financial planning in our nation today and he graciously has some nice things to say about yours truly and Sense on Cents.

What nice things? When Wally Cato was asked,

Who are some of your favorite famous friends? (more…)

The Height of Hypocrisy or Why America Should Be So Outraged

Posted by Larry Doyle on October 27th, 2010 8:26 AM |

Not that we needed any more reason to castigate those who have driven our economy and our nation into a ditch but the story I bring you this morning provides us just that.

I am well past the point of surprise in finding shock value in stories exposing financial charades. That said, I hope I never lose the feeling of complete and total indignation in shedding light on those involved in the charades and others who would provide cover for it. To wit, count me as extremely pissed off this Wednesday morning. CFO Magazine highlights the hypocrisy embedded in our political and financial system with its report, West Wing Accounting:

On Monday, conference attendees in New York were spectators to a simulated White House war room exercise. The object of the exercise wasn’t Iraq or Afghanistan, however, but the economy: specifically, a scenario in which presidential advisers had to consider the bailout of a U.S. state that was just two days away from defaulting on a $1.5 billion bond. (more…)

Is The Clock Getting ‘Close to Midnight’ for FHLB-Seattle?

Posted by Larry Doyle on October 26th, 2010 5:46 AM |

All financial accounting charades to the contrary, the reality of a decaying asset quality and insufficient capital position will cause any institution to quiver. With more banking institutions declaring bankruptcy each and every week, the clock has yet to strike twelve on any of our larger banking institutions. That said, the pressure is certainly mounting on a large west coast institution, that being the Federal Home Loan Bank of Seattle.

I first addressed issues within this specific institution 18 months ago when writing, Putting Perfume on a Pig. I highlighted at that time:

Who gets this? Charles Bowsher, who resigned just last week as chairman of the Federal Home Loan Banks Office of Finance. Bloomberg’s Jonathan Weil does yeoman work in profiling Mr. Bowsher and the joke that is FHLB accounting: (more…)

Ben Davies: Ex Scientia Pecuniae Libertas/Out of Knowledge of Money Comes Freedom

Posted by Larry Doyle on October 25th, 2010 8:47 AM |

I thoroughly appreciate those involved in the markets who also have an equal appreciation for history, languages, literature, and the arts and sciences. Rare is the individual who is able to intertwine their passions and fluent enough to share them with others.

I thank a loyal reader of Sense on Cents who brings us just such an individual, that being Ben Davies, CEO of London-based Hinde Capital. Davies spoke the other day to the Committee for Monetary Research and Education in New York. Although his remarks are extensive, I found them to be quite compelling and truly insightful. I commend Ben for his passion and well rounded perspectives. If you consider yourself a student of the markets, interested in our global economy, or merely a lover of topics well written, you will want to read and savor Ben’s thoughts. I am happy to share them here today.

Remarks by Ben Davies,
CEO, Hinde Capital, London
Fall Dinner Meeting
Committee for Monetary Research and Education
Union League Club, New York
Thursday, October 21, 2010 (more…)

A Good Man

Posted by Larry Doyle on October 23rd, 2010 8:34 AM |

Morning in America and life is truly good.

Despite the ongoing challenges facing our nation and our world, hope does spring eternal. Why do I touch upon this often overused yet underappreciated sense of being and way of life?

Since launching my blog in January 2009, I have received innumerable comments and personal e-mails from readers. I thank each and every person who takes the time to write and share sentiments on the wide array of topics I address. I write today of “A Good Man” because I wake up this morning having received a message overnight from a reader which truly touches me. I am compelled to share it with you. I would hope those who read it will in turn share it with others. (more…)

12th Street Capital Provides Perspective on the Foreclosure Fiasco

Posted by Larry Doyle on October 22nd, 2010 11:23 AM |

What the hell is truly going on within the entire mortgage foreclosure fiasco? There are seemingly more angles to this mess than there ever were choices of mortgage products themselves. Where can we turn to make some ‘sense’ of this madness? Let’s check in with the crowd on the cutting edge of this sinkhole, that is our friends at 12th Street Capital. Today they write,

Not surprisingly the ones that look to be best positioned during this mortgage foreclosure/put back fiasco are the lawyers. As reported by late yesterday, “A spokesperson for the New York law firm Quinn, Emanuel Urquhart & Sullivan confirmed to HousingWire it has been hired by the Federal Housing Finance Agency, a move some say means the government-sponsored enterprises are going after bad mortgages it bought from originators.” Guess what, the GSEs have ALWAYS pursued repurchases. (more…)

Ray Dalio’s ‘Hyper-Realism’ Defines ‘Sense on Cents’

Posted by Larry Doyle on October 22nd, 2010 9:12 AM |

In a world awash with lies, obfuscation, backstabbing, conflicts of interest, and those who prosper via these machinations, are there individuals and companies whose very core is defined by a perpetual pursuit of truth, transparency, and integrity? Of course there are many people who cherish these virtues and try to live and work by them. That said, within even the most well-intended organizational structure these principles will seemingly often be compromised for a variety of reasons. Is there an organization that not only promotes the pursuit of these virtues but has actually made them the foundation on which it operates and invests?

In fact there is. Let’s take a hard look at perhaps the single most successful fund in the markets today with a track record of success that would be the envy of all. I am talking of Bridgewater Associates based in Westport, CT.

Bridgewater is run by Ray Dalio. What does Ray have to say about his corporate philosophy? Let’s navigate as Ray writes, (more…)

Federal Reserve: Economic Prognosticators or “Just Winging It”?

Posted by Larry Doyle on October 21st, 2010 6:47 AM |

All hail the mighty and powerful Federal Reserve!!

Is that right?

Are we all supposed to bow down and prostrate ourselves at the throne of Ben Bernanke and assume he is ‘all knowing’? The fact is the Federal Reserve has assumed a mantle of being ‘all powerful’ but who in our country is willing to challenge the Federal Reserve? Are we supposed to merely turn over the economic fortunes of our nation and our children’s future to one individual and one institution without aggressively calling them on the carpet? What happened to the calls for increased Fed transparency? What happened to the pressure on the Fed to justify their actions? The silence is deafening.

Those with a degree of sense on cents understand and appreciate the following: (more…)

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