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HomeWhat Wall Street Secrets Will FCIC Reveal?
Posted by Larry Doyle on September 2nd, 2010 10:06 AM |
Information is everything.
There is no doubt that the development of the internet and a wide array of websites has led to a significant increase in the amount and quality of information accessed and processed by many. That said, there is also no doubt that there is an equally aggressive, if not public, effort to protect information, privileged or otherwise. Industry and company specific trade secrets can often be the key to developing and maintaining a hard earned competitive edge in the marketplace. I fully support and appreciate those ’secrets.’ On the other side of this coin, though, there are ’secrets’ which can often be the key to unlocking bad practices, if not much worse.
On this note, after a day’s worth of travel yesterday, I was particularly intrigued to read the Financial Times’ Probe Chief to Issue Wall Street Data. A few comments. Why is it that the FT’s electronic delivery entitles this article as such, while the hard copy entitled it, Probe Chief to Issue ‘Secret’ Wall Street Data? That one little word, ’secret,’ is exceptionally powerful. What is Wall Street hiding? Why are they hiding it? Who specifically is hiding it? Do the secrets entail illicit and fraudulent activities? So many questions. (more…)
Afternoon Cartoon
Posted by Larry Doyle on September 1st, 2010 1:08 PM |
JP Morgan Shuts Proprietary Trading
Posted by Larry Doyle on September 1st, 2010 5:11 AM |
Two weeks ago on an afternoon visit to New York City, I was struck by the changed tone, atmosphere, and demeanor during the meetings I had with a number of Wall Street professionals. The fact that the tone has changed does not necessarily mean that the industry as a whole is entirely chastened by the failings—if not worse—both going into and coming out of the crisis. Without deeply meaningful efforts and accompanying results to promote real transparency and increased disclosures, the industry will continue to fight to maintain ‘business as usual.’ It is an uphill battle.
Further evidence of this reality is provided today with the news that JP Morgan is shutting down its proprietary trading operations. Bloomberg reports, JP Morgan Said to End Proprietary Trading to Meet Volcker Rule:
JPMorgan Chase & Co. told traders who bet on commodities for the firm’s account that their unit will be closed as the company, the second-biggest U.S. bank by assets, starts to shut down all proprietary trading, according to a person briefed on the matter.
The bank eventually will close all in-house trading to comply with new U.S. curbs on investment banks, said the person, who asked not to be identified because New York-based JPMorgan’s decision hasn’t been made public. (more…)
Truth, Transparency, and Accountability
Posted by Larry Doyle on August 31st, 2010 1:44 PM |
Regular readers of Sense on Cents are more than well aware of the amount of focus and attention I have directed toward Wall Street’s self-regulatory organization, FINRA. That said, I am compelled to highlight a recent press release for the simple reason that if even one new person learns of this information then I deem that real and ongoing progress. Even for those somewhat familiar with FINRA and recent developments emanating from its Annual Meeting, this release paints a stark picture of the questions which America deserves to have answered.
Where is the general media and the financial media on this story? Is anybody home??
“TRUTH, TRANSPARENCY AND ACCOUNTABILITY INITIATIVE” PASSED BY MEMBERS AT ANNUAL MEETING
FINRA’s Board of Governors Should Act at September 20 Meeting
Led by a decorated former U.S. Army Green Beret and Iraqi War combat veteran who heads a small securities firm, member broker-dealers of the Financial Industry Regulatory Authority (FINRA) decisively overrode management opposition to approve proxy proposals to investigate alleged corporate wrongdoing and substantially reform governance at the Wall Street self-regulatory organization. (more…)
Our Ongoing Recession
Posted by Larry Doyle on August 31st, 2010 5:56 AM |
I have informed more people than I care to count that I do not believe we are going to have an economic double dip. Am I turning positive on the economy? Do I see blue skies and fair winds on our economic horizon? No, regrettably not. The reason I do not believe we will have an economic double dip is very simply I do not believe that our “real” economy, not the government sponsored version, ever really came out of the initial recession.
People may care to debate or challenge me on my premise, but my ’sense on cents’ leads me to believe that we have been experiencing one long and ongoing recession. I definitely sense that more people are now coming to accept this reality as well. This ‘walking pneumonia’ economic syndrome is captured in a recent commentary by Rick Davis of Consumer Metrics Institute,
The “Great Recession” that began in 2008 has had many nuances, but among the most important are that many of the observed changes in consumer behavior have begun to linger, much as the recession itself now appears to have done. If a new consumer thrift paradigm becomes endemic — either because of natural demographic processes or scarred generational memories of upside-down loans — the lingering recession might well end up being measured in years, not quarters as commonly expected. (more…)
What Really Happened at Stanford Financial?
Posted by Larry Doyle on August 30th, 2010 11:05 AM |
Is this game of life a total mystery? In many respects, life is a mystery. While there are many aspects of life we may never fully understand, there are those elements for which we can gain greater understanding through research, study, transparency and disclosure.
Along these same lines, to what degree is the world of financial frauds a mystery? How much of what transpired to lead us into our current economic crisis will we never truly learn? While our financial regulators and legal representatives may work toward providing transparency and disclosure, will the American public ever learn the full extent of the two largest financial frauds of the last few years–those being the Bernard Madoff and Allen Stanford travesties.
I ask this critically important question in light of the Freedom of Information Act exemption provided to the SEC in the recently enacted Financial Regulatory Reform package. Will that exemption inhibit transparency and disclosure? Should the American public blindly accept and trust the SEC at each and every turn? How might we ever know? (more…)
Ben Bernanke’s “Hail Mary”
Posted by Larry Doyle on August 29th, 2010 11:12 AM |
Hail Mary passes are typically thrown late in a game in an attempt to clutch victory from the jaws of defeat. Ben Bernanke’s statement at the Fed’s Jackson Hole conference this past week is an indication that he is getting ready to throw his “Hail Mary.” The problem that I see, though, is that our ‘game’ is only somewhere in the second quarter.
Have you ever witnessed a football game where one team literally has to scrap its game plan because it finds itself in such a huge hole in the first quarter? That, my friends, is analogous to the state of the U.S. economy going into 2008. While we could debate whether the calls made by our coaching staff in Washington have helped or hurt our recovery, the fact is Ben and his fellow coaches have thrown everything and the kitchen sink at the economy and the results are anything but robust.
For a review of the game to date and the uncertain prognosis going forward, The New York Times’ Peter Goodman provides a wealth of ’sense on cents’ in his fabulous and comprehensive commentary, (more…)
Sense on Cents Endorses eWallStreeter
Posted by Larry Doyle on August 28th, 2010 8:15 AM |
News happens fast and travels faster. Markets react accordingly. Print media is unable to keep pace with the blogosphere in capturing, deciphering, and distributing market moving news and information. This reality does not mean that the blogosphere is not filled with much disinformation, if not worse. What is one to do? Where is one supposed to turn? I am happy to inform readers of Sense on Cents that when I want to know what is happening on Wall Street, I turn to one site to get the quickest and most comprehensive recap of breaking news. Which site might this be? eWallstreeter. (more…)
Raymond James Taking Center Stage in ARS Tragedy
Posted by Larry Doyle on August 27th, 2010 12:05 PM |
The play that has more acts and actors than the longest running shows on Broadway is regrettably anything but entertaining.
Although the entire financial industry would clearly hope it could wake up from the nightmare known as auction-rate securities, the fact is this ongoing saga is no bad dream but a very real tragedy. Which player seems to be taking center stage in this ongoing epic disaster? Enter stage right, Raymond James.
A month ago, we witnessed in a WSJ review, Raymond James Ordered to Buy Back Auction-Rate Securities:
An arbitration panel ordered two units of Raymond James Financial Inc. to buy back $2.5 million in auction-rate securities from an investor. (more…)
California Non-Sense on Cents
Posted by Larry Doyle on August 27th, 2010 5:07 AM |
If a picture spells a thousand words, then two graphs of the employment situation and future pension obligations in California far exceed the works of William Shakespeare.
Should we file these under the heading of “American Tragedy”? Would these works be referenced when somebody looks up “future default” or “unsustainable”? These future pension obligations did not happen by accident. The projected figures represent the plundering of California municipalities with subsequent tax burdens left to future generations. How did this happen? Let’s “read” the following “tomes” provided by the California Department of Finance and highlighted in The Wall Street Journal,
![[schwarzenegger]](http://sg.wsj.net/public/resources/images/ED-AM115B_schwa_NS_20100826182703.gif)
You might almost think you were reviewing a “Greek tragedy”.
This is no way to run a state or a country.
Larry Doyle
Related Sense on Cents Commentary
Sense on Cents/California
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I have no affiliation or business interest with any entity referenced in this commentary. As President of Greenwich Investment Management, an SEC regulated privately held registered investment adviser, I am merely a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.
