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Random Sense on Cents

Posted by Larry Doyle on November 1, 2011 11:02 AM |

The freak storm that ran through New England over the weekend has left millions without power including yours truly. While the power outage has been more than a nuisance, a number of developments on our global economic landscape deserve comment. On that note, I am compelled to address the following:

1. Regarding my recent commentary about Mitt Romney’s view on housing, I hope readers do not think for a second that I have lost my enthusiasm for exposing the massive fraud that occurred within our mortgage finance industry. I am not optimistic that these frauds will be fully exposed and properly adjudicated but my interest in embracing market based solutions does not lessen my desire for truth, transparency, and integrity in exposing what I believe were elements of racketeering in this space. I believe some of the government programs and public policies have been orchestrated to mask the racketeering under the guise of helping homeowners.

What should the government do? Expose the frauds and the fraudsters.

What is a market based solution? As Laurie Goodman of Amherst Securities recently highlighted, Uncle Sam in conjunction with the banks should promote what amounts to a sales-lease back program in which homeowners rent their homes from institutions holding their mortgage with a shared appreciation component incorporated into the transaction.

2. When is a deal not a deal? The European debt deal announced last week is farcical. With limited details and less money behind this deal, it is now being exposed as falling far short of what market participants and central bankers may have hoped.

Can anybody save the EU? China, perhaps? Don’t hold your breath although the Chinese are certainly gaining real leverage in the process. The IMF? Where are they going to get the money? I think it is a certainty that the EU is going into recession and will serve as a drag on the global economy as a whole.

Why do I think the financial sewage emanating from the EU will ultimately flow to the backdoor of the Federal Reserve? How do we keep a check and balance on Ben Bernanke through this process?

3. Sense on Cents is calling bull$*^# on both the SEC and its ne’er do well self-regulatory organization FINRA for the news that a FINRA office doctored documents prior to sending them to the SEC.

Why do more and more Americans have such limited trust in those regulating and overseeing our markets and financial institutions? Situations such as these in which little to no transparency and accountability are on display and in which individuals and specifics are not highlighted.

What was doctored? Who doctored it? Why was it doctored? Who benefitted from the doctoring? Why isn’t there an independent external investigator employed to expose this situation? How do we know that there have not been more documents doctored?

4. In regard to the bankruptcy filing by MF Global, we learn today that funds from customer accounts may have been moved to shore up the firm. Customer funds are sacrosanct and can never be touched in this manner! Will we learn what really happened here? If customer funds were moved, will those involved be held accountable? Does Jon Corzine, the CEO of MF Global and former governor of New Jersey, have legal liability?

What a world.

Questions, comments, constructive criticisms encouraged and appreciated.

Navigate accordingly.

Larry Doyle

Isn’t it time to subscribe to all my work via e-mail, an RSS feed, on Twitteror Facebook? Do your friends, family, and colleagues a favor and get them to do the same. Thanks!!

I have no affiliation or business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets, our economy, and our political realm so that meaningful investor confidence and investor protection can be achieved.

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