Sense on Cents

While taking a brief respite from writing last week, I was struck by a number of stories worthy of real attention. Some of these items have received a fair bit of focus, while others may have passed largely unnoticed.

I will reference these stories now and will certainly come back to many, if not all, of them in the near future. The items include:

1. In what might only be compared to trying to turn around the Titanic on one of your local streets, the Bank of Japan is launching a “quantitative easing on steroids” program. The goal of “all this juice” is to generate a 2% rate of inflation in the next two years from what has been a two-decade deflationary cycle. 

Described as “throwing cash from a truck” by the FT, this policy to promote the yen carry trade will certainly support asset markets, but whether it has a meaningful impact on the Japanese economy is a question that remains not easily answered.

2. Given the disdain this blog has directed to former SEC chair Mary Schapiro over the last four years, I had to smile last evening in reading an invective launched upon Schapiro by none other than Nassim Taleb in a commentary written by Bloomberg’s Bill Cohan. The highly regarded financier  — most commonly associated with the coining of the terminology “black swan” to describe the market crisis of 2008 — left nothing to imagination in stating:

“I find Mary Schapiro morally repulsive.”

Me too.

3. How does an employee go from being promoted and consistently rated as a “high contributor” to then, in short order, being shown the door? Certainly any number of ways, but one avenue would be to “not play ball” and “question authority” within the ranks of the organization derisively known in these parts as Wall Street’s secret police, aka FINRA.

I first referenced Joe Sciddurlo a few years back when he dropped bombshells on FINRA. Sciddurlo filed a wrongful termination suit in the Southern District of New York the other day. Might Sciddurlo’s case be the catalyst to finally shine some real light inside this organization? We could only hope.

4. The story last week that, in my opinion, deserves the greatest attention lies within the “unambiguously weak” employment report released on Friday. The news that the labor participation rate sunk to 63.3% — a level not seen since the late 1970s — has enormous implications for our economy and our nation. I envision the following ongoing regrettable developments:

>>A sizable and growing permanent underclass in America with accompanying increases in the rate of poverty, demands on government welfare programs (already witnessed in the spike in Social Security disability claims), and every other outlet that might be able to provide some form of economic assistance.

>>Ongoing economic drag as the lack of contribution by the tens of millions mired in the underclass weighs upon growth in America. A longstanding “walking pneumonia” economy? I certainly think so.

>>Increase in urban decay and pockets of rural poverty as those stuck in the underclass are squeezed together given the lack of economic opportunities and resources.

>>Regrettably, the ranks of the long term unemployed are increasingly reflected in the ranks of the young and our black population. Where will these “kids” go to make ends meet? I envision many will enter into illegal activities concentrated in the underworld aka “the black market” (no pun intended). Think we might want to address what happens to the approximately 50% of kids not graduating from urban schools and the others who do graduate but remain functionally illiterate?

>>With demands on charities likely to grow, the Obama administration’s budget proposal to limit the tax write off for charitable contributions for those within the uppermost incomes in our nation is a recipe for disaster.

Almost too much to digest, but certainly no shortage of material as we continue to carefully and judiciously navigate the economic landscape.

Lastly, I want to thank Dow Jones reporter Al Lewis for graciously referencing my to be released book, In Bed with Wall Street, in his commentary last week. More details on this exciting development to follow in the weeks and months ahead.

Your comments and feedback are always appreciated.

Navigate accordingly.

Larry Doyle

Isn’t  it time or overtime to subscribe to all my work via e-mail, an RSS feed, on Twitter or Facebook.

I have no 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 so that investor confidence and investor protection can be achieved.

This entry was posted on Monday, April 8th, 2013 at 8:21 AM and is filed under Banking Institutions, Economy, Education, Employment, FINRA, General, Mary Schapiro. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.