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HomeMore Price Fixing on Wall Street?
Posted by Larry Doyle on March 27th, 2013 6:17 AM |
Here we go again.
With the investigation of the greatest financial fraud ever perpetrated on Wall Street — that being the manipulation of Libor — still in the early stages, news emanating from Europe this morning redirects the shadow from that organized activity into the dark and dank world of credit derivatives, aka CDS.
Recall that cornerstone principles of an industry that operates as an oligopoly are: (more…)
Update on Cyprus: Russian Banking Ingenuity
Posted by Larry Doyle on March 26th, 2013 7:51 AM |
With the news that the larger depositors (i.e, those accounts with greater than EU100,000) in Cypriot banks will bear the brunt of the burden of the bailout and bail-in, one would think this might incite fear and outrage amongst this crowd.
These depositors are being prepped to lose upwards of 40% of their holdings. Many of these depositors are known to be Russian businessmen.
Who knows what the future holds for the island nation of Cyprus, but if we were to believe some of what we read in the Financial Times this morning, the fear and angst expected within the Russian business community seems to be met with an amazing sense of equanimity. How so? (more…)
Cyprus: An Insider’s Perspective
Posted by Larry Doyle on March 25th, 2013 11:59 AM |
News that Cyprus has negotiated a bailout of its banking system replete with massive haircuts for depositors with greater than EU100,000 and capital controls as well may have forestalled a meltdown within markets. Yet this small island nation faces a very uncertain economic future.
How might what unfolds there impact other nations in the EU if not elsewhere in the world as well? Will the bailout and associated bail-in of the Cypriot banking system ultimately be a deal which precipitates the departure of this nation from the Euro-zone?
Let’s navigate and get an insider’s perspective from Athanasios Orphanides, the former governor of the Central Bank of Cyprus, who was interviewed on Bloomberg Surveillance this morning: (more…)
Health Care Premiums: Bend Over ‘n Brace Yourself
Posted by Larry Doyle on March 22nd, 2013 8:04 AM |
I guess we might soon expect Ben Bernanke and his pals at the Federal Reserve to discount the cost of health care from the core rate of inflation. I mean the cost of health care is not truly indicative of what it costs to run a family now, is it?
For those not aware, food and energy costs are not incorporated in determining the core rate of inflation. If the Fed discounted the costs of all goods and services, we might just be able to generate a report that reflects stable prices.
Pardon my sarcastic cynicism, but it is hard to restrain myself upon reading a lead story in this morning’s Wall Street Journal that should be entitled, Health Care Premiums: Bend Over ‘n Brace Yourself. Let’s navigate as the WSJ writes . . . (more…)
Could a “Cyprus-Like” Situation Happen in US? It Already Has
Posted by Larry Doyle on March 21st, 2013 8:00 AM |
The banks in Cyprus remain closed until at least next Tuesday out of fear that once the doors open a massive run on the banks will ensue.
The situation in Cyprus is clearly evidence of a financial system that remains on life support and that drastic situations precipitate drastic actions.
Before we lose our heads, though, isn’t this why free markets develop and implement rules of law? Indeed — or so we thought.
With the outcome of the situation in Cyprus remaining very much in question, many people in America wonder if a similar situation might unfold here. (more…)
Hats Off to Paul “Spider” Scialla
Posted by Larry Doyle on March 20th, 2013 7:57 AM |
I would like to take a break from my regular writing on the twists and turns of our economic landscape to pay tribute to a young man with whom I had the good fortune of working at Union Bank of Switzerland back in the late ’90s.
Yesterday, while making my regular visits to various financial sites, I did a double take when I saw a photo on Bloomberg of a man with piercing eyes. Without initially seeing the caption connected to the photo, I immediately thought “I know that face.” (more…)
Bobby Knight’s Keys to Success
Posted by Larry Doyle on March 19th, 2013 10:46 AM |
Say what you want about legendary basketball coach Bobby Knight, but he won and played by the rules. Wound a little tight? No doubt. Abrasive? Clearly. Abusive? Nobody’s perfect.
Knight was run out of the University of Indiana by the administration after an ugly incident in which it was videotaped that he physically assaulted a player. He got what he deserved.
That said, the overwhelming percentage of his players swear by him. In a world of competitive sports where “rules are supposedly meant to be broken,” Knight’s programs were never sanctioned and the bulk of his players graduated.
While Knight’s personality may rub some people the wrong way, there are lessons we can learn from him as well. What are Knight’s 4 keys to successful and effective management? (more…)
“Stevie Boy” Cohen: Too Big to Prosecute?
Posted by Larry Doyle on March 18th, 2013 11:52 AM |
News released late Friday afternoon that the SEC has agreed to a settlement of $616 million with entities connected to SAC Capital is viewed as another indication that our financial police are playing hardball, right?
I mean $616 million is a lot of money, correct? Yes and no. Money is relative and playing hardball is in the eye of the beholder.
Did SAC and its founder Steven A. Cohen, aka “Stevie Boy” Cohen, just enter the realm of Goldman Sachs, JP Morgan, and the other heavyweights on Wall Street who have been defined as “too big to fail, to regulate, and to prosecute?” (more…)
What is Going on in Cyprus?
Posted by Larry Doyle on March 18th, 2013 8:23 AM |
News emanating from the Republic of Cyprus that depositors in its banks will likely be hit with a tax to support an EU bailout of this small nation is a warning signal that the financial system specifically and the world at large remains fraught with risk.
Some individuals within central banks and creditor nations may like to discount the impact of the taxing of depositors as no big deal. Additionally, I can already hear people asserting that Cyprus is a tiny nation with an economic GDP that is hardly statistically significant.
Should we disregard a tax on bank depositors that would relegate the topic of deposit insurance onto the garbage heap? At our peril. Let’s navigate. (more…)
Happy St. Paddy’s Day!!
Posted by Larry Doyle on March 17th, 2013 9:56 AM |
It is a great day for the Irish.
Saint Patrick spread the faith throughout Ireland. Today I hope that you may be a channel of the peace that runs through your faith — whatever it may be — and that you might spread your faith and peace to others as well.
In that spirit, I welcome sharing a brief yet classic Irish ballad.
Enjoy. . . and navigate accordingly.
Larry Doyle
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I have no business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.
