RSS Feed
Twitter
Facebook
Email
HomeTARP Transparency Is a Joke as Uncle Sam’s $81 Billion Investment in Automakers Unlikely to be Recovered
Posted by Larry Doyle on September 9th, 2009 7:52 AM |
Do the ends justify the means? Is the American taxpayer better off not knowing how his money is being spent when rescuing private corporations? Is the Obama administration’s claim of transparency a mere facade? I believe a strong case could be made that all of these assertions are true in reviewing the likelihood of the American taxpayer recouping taxpayer funds injected into GM and Chrysler.
While government pundits and market analysts will crow about positive returns on TARP funds injected into banks that never truly wanted the money in the first place (Goldman Sachs and JP Morgan amongst others), they have little to say about the TARP money which will not likely be coming back from the automotive industry.
I highlighted this point on June 30th in writing “The TARP Has a $159 Billion Loss”:
Of the $699 billion in total capital, $142 billion has yet to be committed. Of the funds already allocated, Uncle Sam has incurred a total cost of $159 billion. What does that mean?
Recall the number of times that government officials told taxpayers that we would make money on investments in AIG and the like. Well, so far we’ve lost $159 billion dollars across all our TARP investments. The loss is calculated as the difference in funds committed and allocated to securities and the market value of those securities. That loss represents 36% of the funds committed and actually allocated.
Where do a large percentage of the funds unlikely to be recovered reside? Detroit, as in GM and Chrysler.
Bloomberg sheds further light on losses embedded in the TARP in writing U.S. Taxpayers Unlikely to Recover Auto Investment, Panel Says:
U.S. taxpayers are unlikely to recover their $81 billion investment in General Motors Co. and Chrysler Group LLC and were “left in the dark” on specifics of a decision to aid automakers, a congressional panel said.
The report didn’t estimate how much of taxpayers’ aid to the auto industry will be recovered. The panel said GM stock would need “highly optimistic” returns in order for the full investment to be repaid.
The report of the panel, which oversees the Troubled Asset Relief Program, raises questions about the Obama administration’s transparency in aiding automakers and challenges the Treasury Department to make more disclosures about company decisions and the government’s future role.
“Congress and ultimately the American taxpayer have been left in the dark concerning details of Treasury’s review process and its methodology and metrics at a time when Treasury committed additional TARP funds to these companies,” the panel said.
“The Treasury auto team failed to disclose to the public both the factors and criteria it used in its viability assessments, the scope of outside involvement in its evaluations, and its basis and reasoning for selecting particular benchmarks,” according to the report. “Simply, its disclosures did not go far enough.”
As these companies try to recover, taxpayers should not expect a return of any of these $81 billion. Taxpayers should also not expect transparency from Washington. Being truthful and transparent are not exactly consistent with the ‘Washington way.’
LD
The U.S Dollar is Diving
Posted by Larry Doyle on September 8th, 2009 4:32 PM |
Is the U.S. dollar losing its luster as the world’s international reserve currency? If today’s price action is any indication, the greenback is chugging along like a tired old caboose.
The U.S. dollar index is down a full 1% on the day and making multi-year lows against a wide array of other currencies. Our friendly Wall Street Journal Market Data Currency page provides a useful snapshot of our tired old greenback (click on image for larger chart):
Why is the dollar giving so much ground?
1. perception that the U.S. economy is in tougher shape than other economies around the world.
2. perception that these other economies will be forced to raise rates sooner than the Federal Reserve will raise rates here in the U.S.
3. traders are borrowing U.S. dollars at 0-.25% and using them to invest elsewhere in what is known as the ‘carry trade’ otherwise known as utilizing leverage.
4. continued concern about the viability of the U.S. dollar as the world’s international reserve currency.
The Wall Street Journal offers an interesting perspective on this development in writing, Dollar in a Funk as Traders Bet on Slow Rebound:
Currency analysts say the dollar’s slide has room to run now that it has broken free of recent trading ranges. Several are predicting the euro will test $1.50 by the end of the year. Mr. Mackel also sees continued strength, in particular, for the Australian dollar, which is backed by a healthy economy and exposure to a rebounding China. He says the Aussie currency could reach near parity with the U.S. dollar by the end of 2010. Early afternoon Tuesday it was trading at US$0.8641, up from US$0.8560.
Friday’s U.S. jobs report was a significant factor in the dollar’s fall. The U.S. unemployment rate hit 9.7% in August, and that means the Federal Reserve will likely keep interest rates low for the foreseeable future.
I maintain that our leaders in Washington are not unhappy with a weaker dollar. Why? A weaker currency will help promote greater exports as our products appear cheaper. Additionally, it is a means toward generating inflation and effectively monetizing our growing deficit. That said, how do the wizards in Washington stop the slide of the dollar and generate only a whiff of inflation?
The simple fact is a decline in the dollar is a global statement of lessened confidence in the American economy as the driver of global growth.
That is reality.
LD
The Greenback is Getting Some Chinese Competition
Posted by Larry Doyle on September 8th, 2009 12:57 PM |
The BRIC nations (Brazil, Russia, India, China) have certainly not been bashful in promoting the need for some competition in the greenback as the international reserve currency. Is that competition going to escalate as China issues yuan-denominated bonds for the first time? Major high five to MC of Investor Rebellion for bringing this developing story to my attention.
The Business Insider writes, Dollar Threat: China Selling Yuan Bonds for the First Time:
In yet another step to internationalize the yuan as a global currency, China will be selling yuan-denominated bonds on the international market for the first time.
This could be a new option for fixed-income investors, including central banks, who want to diversify away from the dollar.
AP: The 6 billion yuan ($876 million) bond sale is slated for Sept. 28, the ministry said. Hong Kong is Chinese territory but has its own currency and regulatory system and often is used by Chinese companies to deal with foreign investors.
The yuan, also known as the renminbi, or people’s money, does not trade on global markets despite China’s huge foreign trade, but Beijing is gradually expanding its use abroad.
It will be interesting to see what yield these bonds end up offering, and if central banks bite.
Given the consensus view that the yuan is artificially undervalued versus the dollar, longer-term Chinese bonds are likely to be appealing for their currency appreciation potential, in addition to their interest income. We expect a strong a response.
This development is very meaningful and bears watching. Questions and concerns I would have for investors include: (more…)
Did the SEC Have Any Experienced People Looking at Madoff? You Betcha!!
Posted by Larry Doyle on September 7th, 2009 11:24 AM |
While the SEC Inspector General David Kotz would have the American public believe the SEC fell down in its oversight of Bernie Madoff largely due to inexperienced investigators, this claim is very shallow.
Former SEC lawyer Genevievette Walker-Lightfoot was investigating Madoff in 2004 but was reassigned when she started to ask the hard questions. The Wall Street Journal highlights Ms. Walker-Lightfoot’s time working for the SEC in writing, Ex-SEC Lawyer: Madoff Report Misses Point:
A former Securities and Exchange Commission lawyer who investigated Bernard Madoff in 2004 says the new report on how the agency failed to uncover his massive fraud places too much blame on staff examiners and overly generalizes about their “inexperience.”
Genevievette Walker-Lightfoot told Dow Jones Newswires on Thursday the SEC inspector general should have focused more of his attention on how supervisors, rather than the staff examiners and investigators, handled the agency’s many stillborn probes of Mr. Madoff.
SEC inspector general, H. David Kotz, reached by telephone, said he considered it premature for Ms. Walker-Lightfoot to criticize the summary before the full response was released. He described himself as “befuddled” by her remarks. Mr. Kotz noted the decision to release the summary was made by SEC Chairman Mary Schapiro, not by his office.
An executive summary of the report, released on Wednesday, repeatedly emphasized what it described as the inexperience, confusion and limited expertise of staff assigned to at least six investigations involving Madoff since 1992.
Ms. Walker-Lightfoot — who recommended more action in a 2004 investigation that was shelved — said those descriptions were overly simple, and the summary generalized too much.
“My experience is a key example,” she said. “Here was someone who raised red flags and said “We need to look into these things.” But I wasn’t senior management, so it wasn’t my call.”
The full report is expected on Friday, and she said she would reserve final judgment on it until then.
Ms. Walker-Lightfoot, who is now a lawyer for the Federal Reserve Board, was part of a four-person team in the SEC’s Office of Compliance Inspections and Examinations, or OCIE, who investigated Mr. Madoff’s firm in 2004. She informed a supervisor of inconsistencies she learned of during her review and suggested following up.
Instead, her team was ultimately diverted to another case.
Who made this decision? Why? (more…)
Rick Johnson Weighs in on NASD and FINRA
Posted by Larry Doyle on September 6th, 2009 2:50 PM |
Rick Johnson of First Coast Planning was my guest on NoQuarter Radio’s Sense on Cents with Larry Doyle last spring. It just so happened that Rick was watching America’s Nightly Scoreboard on Fox Business News last Thursday evening when I was interviewed along with former SEC Chair Harvey Pitt, the head of the Madoff Victim’s Coalition Ronnie Sue Ambrosino, and Attorney Richard Greenfield representing Amerivet Securities in its complaint vs. FINRA.
Rick Johnson has had experience with the NASD and FINRA reviewing his own practice. He shares that and more in a recent blog post. Thank you Rick for the shout-out for Sense on Cents. Rick wrote this past Friday at his site, Keep Your Assets, Take My Advice:
Harvey Pitt Former SEC Commission is an Apologist for FINRA?
I was stunned last night watching Fox Business with David Asman. He had on his show two Madoff victims, Sue and Dominic Ambrosino, Larry Doyle of senseoncents.com and former SEC Commissioner Harvey Pitt.
The tide is beginning to turn against FINRA. Larry Doyle has long spoken out against FINRA on his blog at www.senseoncents.com. Last night on Fox Business, LD mentioned the fact that FINRA had money in Auction Rate Securities in 2007, but inexplicably got their own money out before the Auction Rate Securities collapse. I guess they are an investor watchdog, but not when it comes to saving their own bacon.
Sue and Dominic Ambrosino are wise to FINRA and their culpability in the Madoff Scandal. They pointed out that FINRA has not been too transparent about whether they too lost money with Madoff. The latest FINRA Annual Report does not disclose whether they did or did not lose money with Madoff or one of his feeder funds. Word on the street is that they did lose money as a result of Madoff.
Former SEC Commissioner Harvey Pitt, not one of the best SEC Commissioners we ever had by the way, seemed to me to have been given talking points. He kept trying to hide the fact that FINRA and its predecessor organization was responsible for the Madoff mess. Pitt kept trying to keep the blame squarely on the SEC. This was stunning to witness from my perspective.
David Asman pointed out that Mary Shapiro was the former head of FINRA and now she is the head of the SEC. I have nothing against Ms. Shapiro, but it seems like they got someone at the helm of the SEC who can probably keep FINRA out of it. However, time will tell. FINRA is guilty as sin in my opinion. You cannot convince me that FINRA did not look the other way when it came to Bernie Madoff.
As a former NASD Registered Principal, I had my office gone through with a fine tooth comb by an ex-NASD Examiner for several years. Of course, I always had good exams. I can guarantee you, the guy that examined my office would have easily discovered the Ponzi scheme Madoff was running.
There is something amiss with regard to FINRA being able to dodge the Madoff scandal up until now. Hopefully, with Fox Business getting a little nosy, the truth will come out about FINRA and their cosy little relationship with Bernie Madoff.
Stay tuned.
Interesting insights from an individual who has had first hand experience with the NASD. Although Harvey Pitt and others would like to give FINRA and its parent a pass in regard to the Madoff situation, do not forget that Madoff did not register as an investment adviser until 2006. To that point, the SEC and NASD (FINRA’s parent) had regulatory oversight responsibilities over Madoff.
Thanks Rick for sharing your perspectives.
LD
No Quarter Radio’s Sense on Cents with Larry Doyle Will Return Next Sunday, September 13th
Posted by Larry Doyle on September 6th, 2009 8:03 AM |
In light of the Labor Day holiday, I will not be hosting my weekly radio show this evening. I hope people are able to enjoy the holiday weekend with family and friends.
Rest assured the show will return next Sunday evening September 13th. I have a fabulous guest for next week’s show. Bruce Carton will join me to discuss a wide range of securities litigation and enforcement issues which currently occupy center stage on our economic landscape. Bruce is uniquely qualified to discuss these topics. How so?
Bruce Carton is the editor of Securities Docket and the author of the SD Insider Column. Bruce is a former Senior Counsel with the SEC’s Division of Enforcement, as well as a former securities litigation partner with one of the world’s largest law firms. He is a featured columnist for Compliance Week on securities enforcement and litigation issues, and the author of Compliance Week’s “Enforcement Action” blog.
As we collectively navigate the economic landscape, and wonder where we can turn to receive a rationale outlook and view of the world of finance, keep reading Sense on Cents.
Enjoy the Labor Day Weekend.
LD
September Month to Date Review of Markets
Posted by Larry Doyle on September 5th, 2009 7:32 AM |
Although our financial industry and media have worked diligently to have people focus on daily market swings, in my opinion markets are best monitored on a monthly, quarterly, and annual basis. Why? It takes out the noise, of which there is plenty.
In this spirit, I plan on providing a month-to-date review of market stats along with appropriate commentary on news of note from the prior week. I hope readers find this review beneficial. Feedback always welcome.
Equities (Friday 9/04/09 close, month-to-date return)
DJIA: 9441, -.6%
Nasdaq: 2019, +.5%
S&P 500: 1016, -.4%
MSCI Emerging Mkt Index: 844, 0.0%
DJ Global ex U.S.: 184, +3.3%
>> Commentary: after an initial selloff early in the week, the markets rallied on Thursday and Friday, primarily after the employment report. I place a heavy discount on this week’s trading activity given the very heavy vacation calendar and long holiday weekend. I remain in the camp that the equity markets will correct 5 to 7% from current levels.
Bonds/Interest Rates
2yr Treasury: .93%, down 5 basis points (1 basis point is .01%)
10yr Treasury: 3.44%, up 3 basis points
COY (High Yield ETF): 6.14, +1.5%
FMY (Mortgage ETF): 17.31, -.5%
ITE (Government ETF): 57.18, -1.0%
NXR (Municipal ETF): 14.09, 0.0%
>> Commentary: while interest rates gyrated during the week, the biggest development was the yield curve steepening. Why? What is going on? Two things. There is definitely an increased nervousness about the economic recovery. This anxiety is causing more investors to seek the safety of short maturity U.S. Treasuries. Additionally, the market has its regular 3yr, 10yr, and 30yr auctions next week. In the face of that supply, the street is trying to back up rates on the longer maturity paper (10yr and 30yr) to take it down at a more attractive rate.
U.S. Dollar
$/Yen: 93.02 vs 93.11 at August month end
Euro/Dollar: 1.4304 vs 1.4338 at August month end
U.S. Dollar Index: 78.20 vs 78.14
>> Commentary: minor moves up and down
Commodities
Oil: $67.79/barrel vs $69.93 at August month end
Gold: $996.1/oz. vs $952.4 at August month end
DJ-UBS Commodity Index: 122.93 vs 125.73 at month end
>> Commentary: in my opinion, the moves in commodities represent the strongest indication of global economic activity. The continued downtrend in oil specifically and commodities in general signifies to me a slowing in the global economy. Where is the money going? Gold. Why? Investors are getting nervous and gold is a safe haven.
I hope readers enjoy these insights as much as I enjoy providing them. Please share your thoughts and comments, especially those who may share differing opinions. Honest debate is good for all.
If you like what you see here at Sense on Cents please subscribe via e-mail, Twitter, Facebook or an RSS feed. Thanks for your support.
LD
Attorney Representing Amerivet Securities Makes Claim FINRA Insider Confirms Investment in Madoff
Posted by Larry Doyle on September 4th, 2009 1:20 PM |
Did we just find the smoking gun which indicates that FINRA (Financial Industry Regulatory Authority) actually invested in the Madoff Ponzi scheme?
I was on a panel last evening on America’s Nightly Scoreboard on Fox Business News (the entire transcript can be found at this link). The topic was one which regular readers of Sense on Cents are most familiar, that being FINRA.
The show is hosted by David Asman. Panelists included Richard Greenfield, an attorney representing Amerivet Securities in its suit against FINRA; former SEC chair Harvey Pitt; Madoff Victims Coalition head Ronnie Sue Ambrosino and her husband Dominic; and yours truly.
I commend the host of the show, David Asman, for being thorough, professional, balanced, and aggressive in addressing the topic. We covered a number of angles including:
1. Amerivet Securities complaint vs. FINRA
2. Mary Schapiro’s tenure and compensation at FINRA
3. FINRA’s investment portfolio, including its sale of auction-rate securities.
4. Did FINRA invest in Bernard Madoff’s Ponzi scheme?
There were a few bombshells that came out of our discussion, including a claim by Mr. Greenfield, the Amerivet Securities attorney, that “somebody well-placed within the organization (FINRA) that told us, in no uncertain terms, there was an investment with Madoff.”
Additionally, former SEC chairman Harvey Pitt provided a qualified endorsement of FINRA opening its books and records in an acknowledgement of the need for greater transparency.
I am happy to provide the transcript of the dialogue which encompassed these two momentous statements:
ASMAN: Harvey, for example, I used to work at the “Wall Street Journal” and we had very strict restrictions about what we could buy, how long we could hold stocks if we bought it, and how we had to disclose it and that sort of thing. It doesn’t seem at least that those disclosure policies apply to FINRA, at least in the case finding out whether they invested with Madoff.
PITT: I don’t — there has been a fair amount of, shall we say, opacity with respect to what the investment activities are and the like. In a real sense, I think that’s probably ill-advised for an enterprise that has regulatory responsibilities.
But so putting that to one side, I do think that people are entitled to know where their money is coming from, where their money is going, what it is being spent and the like. The fact of the matter is the SEC does oversee all these operations. It does overlook all these things. FINRA has been under the microscope at the SEC for many, many years, long before Mary Schapiro got to the SEC.
ASMAN: I want to bring in other parties. But I want to go back to Counselor Greenfield.
Richard Greenfield, how did you get information suggesting that indeed FINRA was investing with Madoff?
GREENFIELD: Well, we got the information, number one, in two different ways. Number one, it has been rumored through many people on Wall Street that there was an investment either through a feeder fund or some other means. Secondly, we also got information from somebody well-placed within the organization that told us, in no uncertain terms, there was an investment with Madoff.
ASMAN: OK. All right. So I think it’s fair to say that FINRA owes the public some answers here.
So joining us now with — are some people who are demanding answers. Larry Doyle, a Wall Street veteran, 23 years, who currently operates his own web site, Sense on Cents — “sense” with an “S” and “cents” with a “C” — which is geared to help people navigate the landscape.
Ronnie Sue and Dominic Ambrosino, good friends of “Scoreboard”, they are Madoff victims who are mobilizing a campaign for greater transparency.
Thanks for coming in.
RONNIE SUE AMBROSINO: Thank you.
ASMAN: Larry, first to you. What do you think about Harvey’s description of the situation?
LARRY DOYLE, WALL STREET VETERAN & SENSE ON CENTS WEB SITE OWNER: I would say two things in regard to the former chairman’s statement. First and foremost, Madoff did not become a registered investment advisor until 2006. FINRA obviously wasn’t formed until 2007. FINRA’s parent, that being, FINRA was formed from the regulatory arms of the New York Stock Exchange, and the NASD.
ASMAN: Right.
DOYLE: The fact is, the NASD did have oversight of Madoff, and so there is an obligation by, to look into the NASD’s activities because, at that point, it was just a broker-dealer.
ASMAN: Have you formulated your own opinion whether there was a conflict of interest here?
DOYLE: Without a doubt. Without a doubt. The fact of the matter is FINRA is a big-money organization. We know they invested in hedge funds, fund of funds, private equity. And they also had a significant investment in auction rate securities, which is sector of the market that has been designated as a fraud by federal judges. The fact of the matter is we know, and have learned from FINRA, that FINRA exited their auction rates securities position, $647 million worth, in mid 2007, as the market was failing, and when they were supposed to be protecting investors.
Further along in the dialogue, we engage in the need for FINRA to open its books and records:
ASMAN: That is great point, Ronnie Sue.
And, Larry, it goes to the point that a lot of people are looking from the outside at what goes on inside in Wall Street and Washington. It’s that Wall Street, Washington nexus. They see all these folks kind of related with each other. The SEC related with FINRA, and related with NASD. You look at Mary Schapiro’s career and you see that. They can miss things because they’re only talking to each other.
DOYLE: I think the term there is incestuous. So the fact of the matter is Washington has an opportunity through this financial regulatory reform to bring total transparency.
ASMAN: How would you do that? Open the records of FINRA?
DOYLE: Open the books. What — what individual in America right now wouldn’t make — doesn’t it make sense for FINRA to be forced to open their books and records, full and total transparency? The markets demand it. The economy demands it. Ronnie Sue and Dominic demand it. For market confidence.
ASMAN: Harvey, if we demand it of banks, why not FINRA or for that matter, why not the Fed? We have a lot of people in Congress saying everybody needs to open the books, everybody needs to be transparent?
PITT: Well I think there’s no question that we need far more transparency throughout the regulatory environment, both for those regulated and those doing the regulation. That, I think, is a very clear proposition, and one that I’m hopeful will be addressed in whatever new legislation comes about.
ASMAN: So we have to leave.
But, Harvey, does that mean you’re in favor of FINRA opening the books so we can find out if they invested in Madoff?
PITT: I’m in favor of there being far more transparency, permitting privacy concerns to allow certain information to be withheld, as long as somebody is overseeing what they’re doing.
I am thrilled that these issues which Sense on Cents has been focused on for the last 8 months are coming into the public light. That said, there remains plenty of work left to do to generate the truth, transparency, and integrity that our markets, economy, and country so badly need.
You can help by spreading this story amongst friends and colleagues. While the Amerivet complaint vs. FINRA will be addressed in the Washington D.C. courts, the fact is the issues revolving around FINRA and regulatory transparency need to be highlighted in the court of public opinion.
What do you think?
LD
If you like what you see and read here, please subscribe to Sense on Cents via e-mail, Twitter, Facebook, or an RSS feed. Thanks for your support.
Related Sense on Cents Commentary
Madoff Victims Call Out FINRA (September 3, 2009)
Amerivet Complaint Against FINRA Alleges Madoff Investment (August 25, 2009)
How Courageous is Mary Schapiro? (June 4, 2009)
U.S. Attorney and SEC Investigating Lehman’s Auction Rate Securities Sales; They Should Also Investigate FINRA’s (May 21, 2009)
FINRA Is Supposed to Police the Market (April 29, 2009)
Unemployment Report: September 4, 2009
Posted by Larry Doyle on September 4th, 2009 9:14 AM |
The widely anticipated September Unemployment Report covering the month of August was just released. Let’s dive right in and take a look at the numbers . . .
Unemployment Rate
June: 9.4%
July: 9.5%
August: 9.4%
September: 9.7%!!
>>LD’s comments: higher than the expectation of 9.5%. Recall that the rate moved down last month from 9.5% to 9.4% as the labor pool shrunk. This move higher puts the rate back on the track it previously held and would project to a likely double digit unemployment rate in the 4th quarter.
Where’s the stimulus? Where are the jobs? Bulls would say the employment situation is stabilizing. Pragmatists look at the numbers and see an economy settling in to a likely low growth path at best. The unemployment rate of 9.7% is the highest since 1983. The underemployment rate of 16.8% is very sobering!!
Non-Farm Payroll (click here for definition of this term)
June: loss of 322k
July: loss of 467k initially revised to a loss of 443k and now revised to a loss of 463k
August: loss of 247k revised to a loss of 276k
September: loss of 216k
>>LD’s comments: Close to consensus, but the prior two months had revisions showing further declines of 49k. (The prior month was revised from a loss of 247k jobs to 276k. July was revised from a loss of 443k jobs to 463k jobs). Manufacturing lost 63k jobs, government showed a loss of 18k jobs with more of these at the state level.I repeat my comments from above. We are not witnessing any inclination by private companies to start the rehiring process. As such, the likelihood of long term structural unemployment is growing. This fact will serve as a real drag on consumers in general and the economy as a whole.
Average Hourly Earnings
June: +.1%
July: 0.0%
August: +.2% revised to +.3
September: came in at .3 with the prior month revised to .3 as well.
>>LD’s comments: Largely due to the increase in the minimum wage. Do not look at this increase as an indication of potential growth in retail sales.
Average Hourly Workweek
June: 33.1 hours
July: 33.0 hours
August: 33.1 hours
September: 33.1 hours
>>LD’s comments: as expected the average hourly workweek remained unchanged. This number, which remains mired at a level last seen in 1964, is an indication that an expected rebuild in inventories is not on the near term horizon.
Further Color: the economy remains significantly challenged. Despite all of the government stimulus and government programs, in my opinion the economy is very vulnerable. Behind these numbers, the consumer is seeing few signs of improvement in the jobs space. That reality is impacting the sluggish retail sales along with the continued increase in delinquencies and defaults on the credit front.
Market Reaction: futures have been bouncing up and down post-report. Prior to the report, equity futures indicated a slightly positive opening to the equity market. Now the futures are closer to unchanged.
Interest rates have also bounced around, but the front end of the yield curve seems better bid as the unsettledness behind these numbers makes investors nervous.
The dollar index is somewhat improved but not in a meaningful fashion.
Add it all up and I see the following:
>> the cheerleaders can put away the pom-poms
>> the pure doom and gloom guys who have been short forever remain frustrated
>> the economy remains challenged and will bump along the bottom. No “V” recovery, but more like the “caterpillar” designation assigned by our Sense on Cents Economic All-Star Bob Rodriguez.
Get used to it because it is not going to change appreciably anytime soon.
I repeat my market call from the other day in which I believe equities will retreat from current levels.
Please track our work here at Sense on Cents via Twitter, Facebook, RSS feeds, or e-mail subscription. Visit and comment often!!
LD
Wall Street Meets Main Street at the Courthouse
Posted by Larry Doyle on September 8th, 2009 8:50 AM |
Make no mistake, the slope of the mountain of injustice is quite steep. Furthermore, we are just starting the trek. Little doubt there should be many stops along the way. You can rest assured that the Wall Street lawyers and financial lobbyists are working diligently to put out the smoldering ruins of fires and campsites which wreaked havoc upon our economic landscape. There appears, however, to be mounting evidence that the Wall Street fires were fed by Washington and financial regulators looking the other way.
Bloomberg highlights some initial progress made on behalf of the American public in the fight for truth, transparency and integrity on our financial and economic landscape. This morning Bloomberg writes, Judges Punish Wall Street as Regulators Just Talk About Reform:
I can only hope the momentum in the courtroom accelerates given the slow and painstaking rope-a-dope game being played out between Wall Street and Washington. Wall Street clearly wants a ‘mulligan’ from the excessive improprieties that led to our current economic crisis. The courts are starting to get wise and adjudicating otherwise. Bloomberg highlights some recent rulings for the public and against the Wall Street-Washington cabal including: (more…)
Tags: Bernard Madoff sentencing, Dipascali sitting in prison without bail, District Judge Richard Sullivan orders DiPascali to jail, Eric Butler Credit Suisse broker guilty of securities fraud, financial regulatory reform meets legal issues, financial regulatory reforms, Judge jack Weinstein of Brooklyn on Butler case, Judge Schira Scheindlin rules against rating agencies, Judge Weinstein comments on Wall Street corruption culture, Judges Punish Wall Street as regulators Just Talk About Reform, legal cases involving Wall Street crisis, Monster Worldwide COO James treacy sentenced to jail, Wall Street injustices inflicted on Main Street, Wall Street legal problems in economic crisis, Wall Street lobby working hard against financial regulatory reform, Wall Street Main Street legal issues
Posted in General, Wall Street | No Comments »