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HomeIs Capitalism Dead?
Posted by Larry Doyle on April 11th, 2011 8:20 AM |
While Uncle Sam in the persons of Ben Bernanke, Tim Geithner et al may promote the fact that our capital markets currently are a reflection of a rebound in capitalism, they would be wrong.
Our markets and the Wall Street banks that dominate them no more embody the true tenets of capitalism than the incestuous nature of the Wall Street-Washington relationship truly represents the best interests of the American public. As The New York Times highlighted this weekend, Banks Are Off the Hook Again,
Americans know that banks have mistreated borrowers in many ways in foreclosure cases. Among other things, they habitually filed false court documents. There were investigations. We’ve been waiting for federal and state regulators to crack down. (more…)
Fiddling While the United States Burns
Posted by Larry Doyle on April 8th, 2011 7:45 AM |
Ben Bernanke’s grand economic experiment of quantitative easing is nothing more than a policy of implementing negative real interest rates. That policy may provide support to puff the markets but it also promotes a very real transfer of wealth and income. The simple fact is quantitative easing and negative real interest rates as a formal monetary policy are neither practical nor sustainable over the long haul.
What do I view as a very real and dangerous consequence of Bernanke’s policy? I am of the strong opinion that Bernanke has created a facade behind which many in Washington and around the country continue to “fiddle while the United States burns.” We evidence this fiddling reality in the midst of the petulant and pathetic budget debate ongoing in Washington. While our leaders nitpick over pennies in order to ‘keep the lights on’, the destructive structural deficit our nation faces casts a very long shadow across our nation’s entire landscape. I firmly believe that many politicians have little true appreciation for that reality. (more…)
Will Wall Street Mortgage Settlement Talks Halt Homeowner Abuse?
Posted by Larry Doyle on April 7th, 2011 5:57 AM |
Call me old fashioned but the idea that those engaged in abusive, and very likely fraudulent, business practices are allowed to negotiate a settlement strikes me as un-American.
That said, the world of unintended consequences in our Uncle Sam and Wall Street dominated economic system brings us just such an un-American approach in terms of addressing our current mortgage mess.
Negotiate? Settlement? Growing up in Boston in a family full of lawyers, I was under the impression that fraud and abuse likely got you 5 to 7 years in a medium security facility and maybe you got out in 3 to 4 with good behavior. Perhaps that form of justice still applies to you and me but for the large monied interests who run this country, we’re talking negotiations and settlement. Wow!! Little wonder why the rage in our nation directed at the Wall Street-Washington incest continues to burn so strongly. Let’s navigate. (more…)
Now We Know Who Blocked the Whistleblower Protection Act
Posted by Larry Doyle on April 6th, 2011 7:50 AM |
Let it be known that with this commentary the Sense on Cents Hall of Shame inducts Senator Jon Kyl (R-AZ), Senator Jeff Sessions (R-AL), and House Speaker John Boehner (R-OH). What have they done to deserve this “honor”? A recent release points the finger squarely at them for assaulting our prized virtues and never ending pursuit of truth, transparency, and integrity. Let’s navigate.
This past January 10th, I inquired Which U.S. Senator Blocked the Whistleblower Protection Enhancement Act? and wrote:
Let’s bang the drum once again to promote truth, transparency and integrity. In this rendition, let’s collectively work to expose the Congressional coward, that is the United States Senator, who blocked the Whistleblower Protection Enhancement Act. In the process, Senator “Coward” took a stand against our prized virtues while defending the monied interests of corporate elitism.
Did you just vomit thinking that our hallowed halls upon Capitol Hill are populated with such louts? Why haven’t others on Capitol Hill raised a hue and cry? Fellow cowards? You think? Getting their bread “buttered” in the process? You think? What happened to our country? (more…)
The Tale of Two Economies
Posted by Larry Doyle on April 5th, 2011 8:16 AM |
What does our economic future hold? Great question, right?
Is our economy truly rebounding as much as our equity markets may portend or are we riding high predominantly due to government stimulus similar to an economic anabolic steroid? Is our future as bleak as the numerous and sundry doomsayers would proclaim? Does it appear as if our economy has a split personality or is operating in two different realms? Do you often wonder what others—especially those in Washington—may be seeing if the economic landscape in your backyard remains very challenging?
I continue to believe our overall economy is operating and will continue to operate with a ‘walking pneumonia’ type condition. The massive debt burdens at all levels of our economy continue to serve as a drag and inhibit any sort of truly robust rebound. Let’s navigate and take the pulse of Rick Davis of Consumer Metrics Institute which captures real time discretionary online consumer activity. (more…)
Unemployment Report Review, April 1, 2011: We Need Yeast
Posted by Larry Doyle on April 1st, 2011 8:52 AM |
This morning’s Unemployment Report may be presented as another in an ongoing series of gradually improving signs of economic recovery. That said, the report lacks one vitally important ingredient. What is that?
Yeast.
What? “LD, what the heck are you talking about?”
As any trained chef knows, “it’s the yeast that makes the dough rise!!” On that note, while pundits and analysts may care to focus on the headline unemployment rate declining to 8.8% and non-farm payrolls increasing by 216k, for those focused on the structural health and well being of our economy, I encourage you to focus on wages. (more…)
What Was David Sokol Thinking?
Posted by Larry Doyle on March 31st, 2011 10:53 AM |
When an executive is in a position of recommending takeovers to perhaps the most legendary business executive on the planet, what is he doing purchasing a sizable position in that stock a week before making that recommendation? Are Americans still supposed to believe the manner in which markets operate and corporate takeovers occur are fully on the up and up? Stop it.
David Sokol can attempt to explain away his personal trading of Lubrizol stock during the month of December but his purchase of close to 100,000 shares (a dollar commitment of more than $9 million) in early January and less than ten days before broaching the topic to Warren Buffet that Berkshire Hathaway purchase the company SMELLS. (more…)
Where Are We Headed in the Middle East?
Posted by Larry Doyle on March 30th, 2011 5:43 AM |
I do not believe during my lifetime that the world has ever been faced with such a wide array of risks and challenges. Stop and ponder the breadth and depth of the risks emanating from Japan, Europe, and the United States. Volumes will be written on how these economic arenas handle the substantial challenges currently facing them. Truth be told, I believe it will be decades before we are able to properly review and fully assess how the world’s central bankers and political leaders navigated the current challenges. We may never know the full truth of what really occurred and how situations were really handled.
While each of the hot spots referenced above could occupy all our focus, the fact is I believe the rapidly moving pace of turmoil in the Middle East represents the greatest risks on our world stage. These risks run from the political and economic to the humanitarian. Beyond that, though, we would be naive to discount that the current rapidly moving developments and unsettledness within the Middle East may lead to extended military engagements with unknown consequences.
Prudence and diligence dictates that we keep a keen focus on the Middle East. To that end, I welcome introducing readers to commentary provided by Gerard Group International. As Ilana Freedman of GGI writes, (more…)
An Irish Chink in the Euro’s Armor?
Posted by Larry Doyle on March 29th, 2011 6:03 AM |
In the midst of my recent travels around Ireland I was asked the following question by an Irish businessman. “Larry, when investors purchase senior bonds issued by banks, don’t they take risk?” I informed this friendly chap that based on how capitalism is supposed to work, that yes, these senior bondholders just like every other investor supposedly take risk when making an investment of this type.
My new friend then inquired as to how and why in Ireland’s recent negotiations with the EU’s hierarchy that the senior bondholders of Irish banks were not compelled to take a haircut. Knowing that we did not have enough time to fully pursue all of the angles to this topic, I gained an up close and personal appreciation for the disgust that many Irish citizens have for the recent ‘supposed support’ Ireland received by the EU and the European Central Bank. (more…)
Will There Be a QE3?
Posted by Larry Doyle on March 28th, 2011 7:56 AM |
Is there really any doubt that virtually all our markets, especially commodities and with the exception of real estate, have been propped higher as a direct or indirect result of the Federal Reserve’s policy of quantitative easing? I have no doubt.
The question remains outstanding just how far the Fed, in concert with its banking friends on Wall Street, has gone and will go to further manipulate our markets. That question may never be fully answered. What a shame! For those who believe a preponderance of truth, transparency, and integrity are the cornerstones for long term fiscal health and financial well being our markets remain a decidedly challenging arena.
In light of this reality and with the end of QE2 on the horizon this June, where do we go from here? A reader posed that very question the other day. (more…)
