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HomeStephen Roach Provides a Wealth of Sense on Cents
Posted by Larry Doyle on July 9th, 2010 10:23 AM |
The Wall Street Journal just released a fabulous interview with Stephen Roach, chairman of Morgan Stanley Asia and soon to transition to Yale University. Roach has always been one to speak his mind, but he strikes me as being even more forthcoming in this interview. What does Roach have to say? Let’s navigate, Stephen Roach: The Alan Greenspan of Asia?,
On the likelihood of a “double-dip” in the U.S.:
Roach: I’d give it a higher probability than most, maybe 40% at some point over the next year. We have a weak recovery, weak labor market, weak consumer purchasing power…and a consumer that’s unable to rely on property and credit bubbles to support consumption anymore. So if you have a disappointing consumer and any kind of unexpected shock you could go down again. […] Double-dips are not as infrequent as you might think…Weak recoveries leave you vulnerable to shocks. (more…)
IMF Hedging on Global Recovery
Posted by Larry Doyle on July 9th, 2010 7:08 AM |
Do we truly need to focus on developments within the emerging economies of Asia or sub-Sahara Africa? I mean, you are probably thinking that we have enough on our plates right here at home to spend anytime thinking about economic developments half a world away. Why do we need to care, and why do we need to be aware of global economic developments? For the very simple reason that in a global economy overwhelmed by massive debts and limited pools of private and sovereign credit, what happens over there very clearly impacts us right here at home.
On this note, let’s review an International Monetary Fund report released yesterday. The IMF writes, World Recovery Continues, But Risks Increase:
…despite the stronger than expected first half recovery, the IMF warned that uncertainties surrounding sovereign and financial sector risks in parts of the euro area could spread more widely, posing difficulties for both financial stability and the economic outlook. (more…)
What Does Rick Davis Think About Yesterday’s ICSC Report?
Posted by Larry Doyle on July 8th, 2010 4:17 PM |
When I see any economic data addressing consumer retail activity, I immediately think of Rick Davis and his fabulous work at Consumer Metrics Institute. On that note, and given yesterday’s strong upward move in the market driven largely by a positively perceived ICSC report, I went straight to the source and asked Rick for his thoughts. I had the following exchange today:
Rick,
Any quick comments or thoughts on the report released by the ICSC? I
know that the report captures same store sales which makes for a big
disqualification and is not properly captured but any thoughts you may
have are always deeply appreciated.
Thanks.
Larry (more…)
Is Washington Enacting Financial Regulatory Reform or Merely ‘Studying’ It?
Posted by Larry Doyle on July 8th, 2010 1:27 PM |
How often have you experienced a situation in which somebody tries to project an air of leadership while truly dodging an issue? In the course of my career, I have witnessed this reality all too often. When and why does this occur? Typically, managers who are weak and overly political play this card. Washington plays this game all the time. The Obama administration has made an art of forming committees to study issues.
Our ‘so called’ leaders would like to project themselves as real leaders doing the people’s business, meanwhile they are beholden to other constituencies. God forbid they actually take a stand and show their true mettle. So we witness our politicians agreeing to ‘study’ issues, which is more often the equivalent of putting issues on the back burner or letting them die on the vine. Who wins? Lobbyists. Who loses? Average Americans. Who tries to save face? Our political cowards. (more…)
Kevin Dillon Meet Peter Sivere
Posted by Larry Doyle on July 8th, 2010 7:10 AM |
A recent headline in my local newspaper highlights a whistleblower case involving JP Morgan and an employee named Kevin Dillon. The article, JP Morgan Employee Files Whistle-Blower Lawsuit, details how Dillon was rebuffed while he attempted to report alleged accounting improprieties by a Texas based hedge fund, Highland Capital Management. This fund has a prime brokerage relationship with JP Morgan.
Dillon has brought suit against JP Morgan for alleged mistreatment as a result of his blowing the whistle. Dillon and JP Morgan are certainly not the only individuals and firms involved in an employee dispute over procedures and treatment. So, why am I writing about this case? For the very simple reason that Mr. Dillon will hopefully read my commentary and know that he is not the first individual involved in a whistleblower dispute with JP Morgan.
Regular readers of Sense on Cents may recall the story of Peter Sivere, a JP Morgan employee who blew the whistle on his employer for allowing after hours trading of mutual funds by a high profile hedge fund. In the process of performing his duties, Sivere engaged attorneys from the SEC. What happened in the midst of engaging these attorneys? (more…)
Kenneth Rogoff: “A Lot of Insolvent European Banks”
Posted by Larry Doyle on July 7th, 2010 5:30 AM |
Kenneth Rogoff
Should the European Union run bank stress tests or not? While that question has been hotly debated over the last few months, we received an answer today from one of the most highly respected economists in the world. Who might that be? Harvard’s Kenneth Rogoff, a Thought Leader and Sense on Cents Economic All-Star.
I have often referenced Rogoff’s work over the last eighteen months (go here) and hold him in the highest possible regard. So, about those European banks and the hotly debated stress tests? What does Rogoff think? Are you sitting down?
In a Bloomberg commentary, European Banks’ Hidden Losses Threaten EU Stress Test, we learn: (more…)
July 4, 2010: Remembrances and Celebrations
Posted by Larry Doyle on July 4th, 2010 9:02 AM |
Let’s take a day off from thinking about our steep slope and challenging terrain as we navigate the economic landscape. Today is a day of remembrances and celebration.
I remember the love and dedication my father-in-law had for our great nation. He would cherish this day as he would attend his local 4th of July parade to salute the nation he loved. Never one to complain about what our nation should do or could do, my father-in-law saw the beauty and opportunity provided by our great land and he embraced it. He appreciated the values and fiber that made our land the beacon amidst the storm. He resonated with real pride, and his deeply sincere and friendly demeanor were infectious. I love him and miss him. I hope those who read this can feel his pride and will share it. He truly represented the best of America.
I also remember my own Dad today. I will be visiting him in the hospital today as he deals with and recovers from recent surgery. His love of family, his determination, his integrity, and his ethic are the rocks and mortar on which every member of my family has forged our own lives. He speaks with such pride of his family and the stories of his descendants coming to this nation. His awe of his great grandfather Mike Doyle who came to this land as a teen from Ireland back in the mid-1800s is a motivating force for me and all my siblings. His signature farewell is “Keep punchin’.” He embodies real American spirit and virtues.
Behind great men, such as my father-in-law and my Dad, stand even better women. My mother-in-law and my Mom are the glue. As is my own beloved. I love these women.
What is the common thread here? Love. We love each other. We love our families. We love helping people. We love our nation. That to me is what the 4th of July is all about.
I hope you are able to share this day with your loved ones remembering and celebrating that which brings us together and makes us a proud and great land.
LD
Bill Gross Projects The ‘Threshold of Mediocrity’
Posted by Larry Doyle on July 3rd, 2010 7:31 AM |
Pimco’s Bill Gross, a Sense on Cents Economic All-Star, recently released his Investment Outlook for July 2010. In my opinion, Gross is an outstanding writer with an uncanny ability to communicate effectively on a host of financial, social, and psychological topics from both a macro and micro standpoint. Given those skills along with the fact that he manages the largest bond fund in the world, “sense on cents” dictates that we ponder his words of wisdom.
These words focus on the structural changes at work in the world today, and how investors should brace themselves for returns that are on the ‘threshold of mediocrity.’
Gross writes:
Global financial market returns stand at the threshold of mediocrity. With bonds priced not for recession but near depression, most major global bond indices now yield less than 3%, surely a forerunner of returns to come. (more…)
