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HomeMarch 14, 2010: Economic/Market Week in Review
Posted by Larry Doyle on March 14th, 2010 9:31 AM |
No rest for the weary given the slew of developments on Wall Street, in Washington, and around the world. That said, are the markets getting tired or are they preparing to receive another jolt of government caffeine?
Welcome to our Sense on Cents Week in Review where I provide a streamlined recap of the major economic data and news, along with month-to-date market returns.
ECONOMIC DATA
Overall, we did not receive a lot of economic news this week but what we did receive was decidedly mixed (although that is not exactly how it was presented). Let’s navigate.
1. Jobless Claims: remained stubbornly high at 460k jobs. Congress extended unemployment benefits until year end as the long-term unemployed remain at extremely high levels. This structural unemployment receives little media attention, but is THE critical issue in our economy. (more…)
No Quarter Radio’s Sense on Cents with Larry Doyle Welcomes Back The Daily Bail
Posted by Larry Doyle on March 13th, 2010 6:47 PM |
UPDATE: This episode of NQR’s Sense on Cents with Larry Doyle has concluded. You can listen to a recording of the episode in its entirety by clicking the play button on the audio player provided below. Once the audio begins, you can advance or rewind to any portion of the episode by clicking at any point along the play bar.
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Feedback from my initial conversation with Steve Megremis of The Daily Bail was so overwhelming that I am compelled to have Steve back on No Quarter Radio’s Sense on Cents with Larry Doyle this Sunday evening from 8-9pm ET.
I first spoke with Steve in mid-January. Given the pace of developments in Washington, on Wall Street, and at so many other points on our economic and political landscape, I am thrilled to have him back on the show. We will leave no stone unturned in discussing healthcare, financial regulatory reform, the Fed, Lehman Bros., and so much more. I guarantee we will pull no punches in promoting truth, transparency, and integrity in our discussion. Don’t miss it!! (more…)
Dick Fuld Unaware of Lehman’s ‘Cooking the Books’? STOP IT!!
Posted by Larry Doyle on March 13th, 2010 2:34 PM |
Given the global interest in this story, I am bumping it up from the original posting on 3/12/2010. LD
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Former Lehman Bros. CEO, Dick Fuld
Reports that Lehman was effectively ‘cooking its books’ prior to its ultimate demise are not a surprise.
Reports that Dick Fuld, then CEO of Lehman, was not aware of the nature of this cooking are both ridiculous and pathetic.
The lifeblood of every financial institution on Wall Street is access to financing for its operations. That financing very often comes in the form of repurchase agreements (repo financing), in which the institution borrows funds while pledging assets. These short term loans, often overnight loans, are unwound at a preset date and preset prices. The rates borrowers have to pay for funds borrowed depend on the credit quality of the borrower itself and the quality of the assets pledged. (more…)
Larry Kudlow on Janet Yellen
Posted by Larry Doyle on March 13th, 2010 7:13 AM |
President Obama will likely nominate Janet Yellen of the San Francico Fed to replace Donald Kohn as number two in the hieracrchy at the Federal Reserve behind Fed Chair Ben Bernanke.
What can we learn about Ms. Yellen? Let’s read Larry Kudlow, a highly regarded economist and market practitioner with extensive experience on Wall Street, in Washington, and on the airwaves. Kudlow and Yellen look at the economy from a decidedly different perspective. Kudlow recently wrote of Ms. Yellen’s nomination and what it says about the Obama administration in his Kudlow’s Commentary:
The new Obama Fed is going to be very dovish when it comes to fighting future inflation and defending the value of the dollar. (more…)
Goldman’s Prop Trading and Reputational Risk
Posted by Larry Doyle on March 12th, 2010 2:52 PM |
On Wall Street, information is everything.
Timely access to information as to who is buying/selling what, how much they are buying/selling, and why they are buying/selling is absolutely invaluable. The Wall Street banks fight tooth and nail to protect their information franchises.
That said, there are supposed to be rules as to how information is handled and processed so that trading complies with the rules of the road. Banks are not supposed to front run clients. Banks are not supposed to give up client names. Do the banks practice what the regulators preach? (more…)
Throw the Book at Steven Rattner
Posted by Larry Doyle on March 11th, 2010 9:31 AM |
Does crime pay on Wall Street?
When those implicated in ‘pay to play’ schemes on Wall Street are not dealt with in truly appropriate fashion, everybody loses. Why? We end up with a loss of confidence not only in the markets, but even moreso a loss of confidence in our judicial system. I am not so naive as to think that our fields of justice are level, but that doesn’t mean we should not pursue that goal and highlight inequities when and where we see them.
Those engaged in financial crimes or schemes including ‘pay to play’ should never be able to buy their own justice by writing a check. That system of justice will never truly dissuade those engaged in or attracted to ‘pay to play.’
I see a strong sign of just such a potential inequity this morning. It smells. (more…)
Chinese Inflation Does Not Mean Global Inflation
Posted by Larry Doyle on March 11th, 2010 8:10 AM |
News this morning that China’s inflation rate has hit a 16-month high is garnering significant attention.
China’s economy is only one-fifth the size of the U.S. economy while China’s population is more than four times that of the United States. In fact, China’s population is approximately one-fifth of the entire world’s population. Clearly, the People’s Republic of China represents a huge growth opportunity in this century.
Bloomberg highlights this inflation news this morning in writing, China Inflation Quickens as Industrial Output Climbs:
China’s inflation reached a 16- month high, industrial output climbed and new loans exceeded forecasts, adding to the case for the government to pare back stimulus measures. (more…)
New York Fed and Treasury Tell Banks to Hold Cash
Posted by Larry Doyle on March 10th, 2010 2:36 PM |
How often have Americans heard politicians screaming at banks for not providing credit? How often have those same politicians and bank regulators informed us that they are working to have banks inject money into the economy to support Main Street?
Regrettably, America deals with this pandering and posturing from our political leaders and regulators all too often. While Americans are being told one thing, what are the regulators telling the banks? Hold cash.
I am not shocked, but certainly disappointed, that American financial periodicals failed to run this story detailing these recommendations from our bank regulators. The London based Financial Times highlights this bombshell in writing, Regulators Tell U.S. Banks to Hold Funds: >>>> (more…)
