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Home2009 Market Review
Posted by Larry Doyle on January 2nd, 2010 11:34 AM |
Time.
More than any period of the last thirty years, I think it is imperative to view the global economy and market prospects with a longer time horizon. Those in Washington and on Wall Street have never displayed the discipline nor the inclination to truly take this approach. I strongly encourage those reading Sense on Cents to view your personal situation and that of our global economy and market with a longer time horizon. Why?
I personally believe our global economy remains in the relatively early stages of a significant fundamental shift. Recall that the shadow banking system provided 40-45% of the credit to our domestic economy. That shadow banking system remains a mere shadow of itself. Pardon the pun.
Try as he might, Uncle Sam can not fill that credit void forever. Credit demand and credit supply remain overwhelmed by the mountain of debts at the federal, municipal, and personal levels. The bad debt embedded in toxic assets on Wall Street also remains. While selected segments of our private market can and will grow, the economy as a whole remains constrained by the aforementioned debts. The price to service these debts (that is, the prevailing level of interest rates) will likely move higher.
Can we experience a confluence of higher interest rates along with a general decline in wages and prices, that is the core of deflation? That double whammy scares the hell out of Fed Chair Ben Bernanke. These questions and prospects will not be answered anytime real soon. They will take time.
What is an individual to do? Continue to pay down debt and be disciplined in maintaining a diversified investment portfolio. On that note, let’s look back at 2009 so we can most effectively look forward to 2010 and navigate the economic landscape.
The figures I provide are year-end 2009 relative to year-end 2008, and the returns for the year. (more…)
January 1st Means College Football so “Let’s Go Bowling”
Posted by Larry Doyle on January 1st, 2010 11:12 AM |
January 1, 2010 . . .
New Year’s Day 2010 brings us hope and blessings for a healthy, happy, prosperous year. Before we get to that, though, New Year’s Day brings us college football so “let’s go bowling” and get our predictions out there for the major college bowl games today and over the next week. I do not study these games that closely, so I’ll merely try to pick the outright winner and disregard the point spread. I hope you will jump in and “go bowling” as well.
Outback Bowl, Northwestern vs Auburn: LD picks Auburn
Capital One Bowl, Penn State vs LSU: LD picks LSU
Gator Bowl, West Virginia vs Florida State: LD picks West Virginia
Rose Bowl, Ohio State vs Oregon: LD picks Oregon
(why is Citigroup still sponsoring this game??)
Sugar Bowl, Florida vs Cincinnati: LD picks Florida
Fiesta Bowl, Texas Christian vs Boise State: LD picks TCU
Orange Bowl, Georgia Tech vs Iowa: LD picks Iowa
National Championship, Texas vs Alabama: LD picks the Alabama Crimson Tide . . . Roll Tide!!
One other sporting event of note is the NHL’s Winter Classic played outdoors today at America’s most beloved ballpark, Fenway Park, between the Big, Bad Boston Bruins and the Broad St. Bullies, otherwise known as the Philadelphia Flyers. The puck is dropped at 1pm, the gloves will likely be dropped shortly thereafter.
LD picks his hometown favorite Bruins in a donnybrook, 6-4!!
Enjoy the games.
LD
Thank You and Happy New Year!!!
Posted by Larry Doyle on December 31st, 2009 4:31 PM |
To all those who have supported my efforts here at Sense on Cents, I thank you and wish you all the best for a healthy, happy, prosperous 2010.
I will be posting a monthly and year end review of the markets and economy over the next few days, so please check in tomorrow and over the weekend.
Additionally, I will be back on the air this Sunday evening January 3rd, 2010 with No Quarter Radio’s Sense on Cents with Larry Doyle. The show this weekend will be an induction ceremony. I will assign those I believe deserving into the Sense on Cents Hall of Fame and the Sense on Cents Hall of Shame. I remain open to ideas and nominations on both ends of the spectrum. I guarantee the review and ceremony will be informative and fun-filled. We can’t lose our sense of humor while we seriously navigate the economic landscape.
In conclusion, I take real pride in Sense on Cents and am humbled to share with you that this commentary is my 1,000th post since initially writing at No Quarter in October 2008.
I look forward to navigating the economic landscape with all of you in 2010.
Thanks again for all your support.
LD
Audit Freddie and Fannie
Posted by Larry Doyle on December 30th, 2009 12:16 PM |
Who will reveal the truth and consequences embedded in the operations of Washington’s newly designed slush funds housed within Freddie Mac and Fannie Mae? The Washington Way all too often pays off those who promote the administration’s interests (both Republican and Democrat alike) while sticking future generations with an ever larger bill.
Is slush fund too harsh a characterization for a Washington-issued blank check? In my opinion, a blank check in Washington has never been anything other than that.
Ron Paul (R-TX) has created quite a stir in 2009 given his continual calls to audit the Fed. Who in Congress will call for the same treatment for Freddie and Fannie?
Let the record show that on December 30th, Sense on Cents is issuing what will be the first of many calls to audit Freddie Mac and Fannie Mae. Why am I calling for an audit of these entities? (more…)
The Freddie Mac Pigsty
Posted by Larry Doyle on December 30th, 2009 7:56 AM |
Freddie Mac and Fannie Mae have served as Washington’s piggy bank for far too long. The issuance of a blank check by Uncle Sam on Christmas Eve to cover losses at Freddie and Fannie through 2012 only cements the legacy of the pigs who have fed at the Freddie and Fannie trough.
While the sty is mighty big, don’t think for a second that the pillaging and plundering of these organizations is restricted to the high and mighty politicos who pretend to know how to develop housing policy and programs. What do I mean?
Tucked away in one corner of the sty is this little gem posted by The Wall Street Journal, Freddie HR Chief’s Big Payday: (more…)
What’s Up with Keith Fitz-Gerald’s Geiger Index?
Posted by Larry Doyle on December 29th, 2009 2:54 PM |
Is there a story brewing about the Geiger Index managed by Keith Fitz-Gerald?
I interviewed Keith Fitz-Gerald in November on No Quarter Radio’s Sense on Cents with Larry Doyle. As with all my guests, I make a point of trying to stay on top of stories and developments with all of them. Having spoken with attorneys, former regulators, money managers, and others on and off Wall Street, 2009 has presented no shortage of material.
I have been looking for stories and developments specifically in regard to Keith Fitz-Gerald and the Geiger Index for one very simple reason: a disproportionate number of people coming to Sense on Cents over the last week to ten days have been utilizing search words that do not reflect positively on the Geiger Index.
I am not now nor would I ever pass judgment on any individual or any fund without an honest and transparent review. That said, my antenna goes up when more than a small number of people are searching for information in an admittedly concerned fashion.
Information is everything.
Anybody with pertinent information on this topic one way or the other and willing to share the same, please don’t be bashful.
Thanks.
LD
Janet Napolitano Should Listen to Larry Johnson
Posted by Larry Doyle on December 29th, 2009 10:46 AM |
The mission of Sense on Cents is to help people navigate the economic landscape. Proper navigation requires a full understanding of risk. What are the risks in our economy, political process, investments, the world?
Make no mistake, the global risks of terrorism have an enormous impact on our global economy. No individual today understands the risks of terrorism more than my friend Larry Johnson, who runs the political blog No Quarter USA. Larry has appeared on several radio and television news shows over the last couple of days to speak about the attempted Christmas Day bombing of Northwest Flight # 253 by Umar Farouk Abdulmutallab.
Given Larry’s extensive background in counterterrorism (he was Deputy Director of Counterterrorism for the State Department), I strongly encourage everyone to listen to his comments.
Thank you Larry for providing such expert professional opinions. Janet Napolitano, Secretary of the Department of Homeland Security, would do well to follow your lead.
A big thank you to C.S. for putting together the following video clips. The first clip is from Larry Johnson’s appearance on last night’s 7PM broadcast of CNN Tonight:
The next video clips are from Larry Johnson’s appearance on last night’s Larry King Live show.
Part I
Part II
Auction Rate Security Anxiety Continues
Posted by Larry Doyle on December 29th, 2009 10:03 AM |
Still they wait.
$150 billion dollars.
Thousands of investors unable to access THEIR funds frozen in Wall Street’s greatest fraud, that is the world of auction-rate securities.
While an initial court ruling against Union Bank of Switzerland defined the sales and distribution of auction-rate securities as a fraud, recent court rulings have shifted the burden of responsibility onto investors.
When I worked on Wall Street, I was never involved directly or indirectly with the sales or trading of auction-rate securities. That said, I understand full well the explicit and implicit guarantees that brokers and salespeople made in distributing this product. The fact that those entities which distributed ARS have not been held to full and total account is an unspeakable travesty. The lives of investors who have been dramatically impacted get little to no attention from the media. Shame on them.
Our federal financial regulators housed within the SEC are nowhere to be found. FINRA remains in bed with the industry and would just as soon not draw attention to its own liquidation of $647 million ARS in mid-2007 as the market was failing.
Days, weeks, months, and now years pass. Where is the justice and retribution for those ARS investors still frozen and unable to access that $150 BILLION!!! (more…)
Why Deflation?
Posted by Larry Doyle on December 30th, 2009 10:03 AM |
My better half asked me today why I thought deflation was likely to be a major problem for us over the next decade. I shared my views on excessive debt, challenging job prospects, excess capacity, and the like. All that said, I’m a former Wall Street trader and not a Secretary of Labor. What does somebody who filled that slot think? Let’s listen to Robert Reich, who headed the Department of Labor during the Clinton administration.
Reich provides a substantive review on the vastly diverging developments on Wall Street and Main Street in a recent commentary posted at Wall Street Pit. While asset valuations have rebounded across a wide segment of the markets, the fact is the fundamentals within our economy are clearly deflationary. Reich highlights as much in writing: (more…)
Tags: declining purchasing power, deflation or inflation, economic outlook for 2010, economic prospects for labor housing manufacturing, inflation or deflation in 2010 and beyond, outlook for economy 2010, purchasing power, Robert reich, Robert reich commentary on Wall Street vs Main Street
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