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HomeLiu Mingkang Provides Sense on Cents
Posted by Larry Doyle on November 16th, 2009 8:21 AM |
Liu Mingkang, Chairman of China Banking Regulatory Commission
With friends like this, who needs enemies?
That trite saying is far too simplistic in defining the diverse and convoluted nature of U.S.-Chinese relations. That said, as President Obama prepares to arrive in the People’s Republic of China for the first time during his Presidency, he is faced with an extremely aggressive overture from Liu Mingkang, China’s chief banking regulator.
What does Mr. Mingkang have to say? Well, let’s just say he has a drastically different opinion on U.S. monetary and fiscal policy than his counterparts in Washington. While our wizards in Washington, Messrs. Bernanke, Geithner, and Summers would lead us to believe that the rebound in markets is a precursor to a rebound in our economy, Mr. Mingkang has a decidedly different take. The Financial Times sheds light on this topic in writing, China Says Fed Policy Threatens Recovery:
The US Federal Reserve is fueling “speculative investments” and endangering global recovery through loose monetary policy, a senior Chinese official warned just hours before President Barack Obama arrived in China for his first visit.
Liu Mingkang , China’s chief banking regulator, said the combination of a weak dollar and low interest rates had encouraged a “huge carry trade” that was having a “massive impact on global asset prices”. (more…)
Obama Administration Won’t Release Mortgage Modification Figures; Sense on Cents Already Did
Posted by Larry Doyle on November 11th, 2009 2:50 PM |
No news is good news, right?
Well, that may work in raising teenagers but when it comes to public policy in general and housing policy specifically the American public deserves to know what is going on. Why? American taxpayers are picking up the tab, that’s why.
Regrettably, our wizards in Washington are often reluctant to provide the transparency the American public deserves.
I witness this dynamic again today in reviewing a story on the mortgage modification program. The Wall Street Journal puts a positive spin on developments in the mortgage modification process by writing, Mortgage Program Gathers Steam After Slow Start:
The Obama administration said Tuesday that its mortgage-modification program has enrolled one in five eligible homeowners, a sign the effort is gathering momentum after a slow start. But so far few of those trial modifications are turning into permanent fixes.
The Making Home Affordable program has begun trial modifications for more than 650,000 borrowers since it was launched in February, according to data released Tuesday by the Treasury Department. That amounts to 20% of those eligible for the program. More than 217,000 trial modifications, or roughly one-third, were under way in just two states: California and Florida.
The program provides financial incentives to mortgage companies and investors to reduce loan payments to affordable levels. The Treasury Department said the program was on track to meet its goal of offering help to between 3 million and 4 million borrowers over the next several years. Those who are 60 days or more delinquent on their mortgages or at risk of imminent default are eligible.
Whether the program will ultimately be judged a success will depend upon how many trial modifications become permanent. To receive a permanent fix, borrowers must be current on their payments in the trial program after three months and submit a hardship affidavit and other documents.
The administration won’t release figures on completed modifications until December…
Won’t release figures on completed modifications until December? Why not? What’s up with that? (more…)
Obama’s Lessened Popularity Is Helping the Market
Posted by Larry Doyle on July 30th, 2009 5:12 PM |
What is driving the equity markets higher?
1. an end to the recession?
2. green shoots?
3. better than expected earnings?
4. excess liquidity?
5. all of the above?
How about President Obama’s decline in popularity? In a perverse way, is a lessened approval rating for President Obama, in fact, supporting our markets?
Has the decline been statistically significant? What has caused the decline? Given that we are living in the Sense on Cents designated Uncle Sam Economy, we would be foolhardy to neglect what political polls are saying.
Gallup reports, Obama Approval Slips Three Points in Past Week:
Amidst President Obama’s push in July to revamp the nation’s healthcare system, Gallup finds his average job approval rating registering 56% for the seven-day period ending Sunday, down from 59% the previous week. This three percentage point drop is the largest week-to-week decline seen in Obama’s job approval thus far in his presidency, and punctuates a gradual descent from his 66% rating in early May.
The current week is starting off no better for Obama than the previous one. His job approval score in Gallup Poll Daily tracking, conducted July 25-27, is 54%; this is his lowest individual reading to date. Thirty-seven percent of Americans currently disapprove of the job he is doing and 9% have no opinion. (more…)
Obama Playing ‘Four Corners’ Offense in Budgetball
Posted by Larry Doyle on July 20th, 2009 12:04 PM |
I thought Barack Obama liked basketball. Lovers of the game coerced the NCAA to utilize a 24-second clock in order to speed the game up, showcase players’ talents, and render the North Carolina ‘four corners’ offense ineffective. What was the basic premise of that offense? Stall tactics.
Well, welcome to the Brave New World of the Uncle Sam Economy where there is none other than President Obama working the budgetball around in true four corners fashion. The Associated Press reports White House Putting Off Budget Update:
The White House is being forced to acknowledge the wide gap between its once-upbeat predictions about the economy and today’s bleak landscape.
The administration’s annual midsummer budget update is sure to show higher deficits and unemployment and slower growth than projected in President Barack Obama’s budget in February and update in May, and that could complicate his efforts to get his signature health care and global-warming proposals through Congress.
The release of the update – usually scheduled for mid-July – has been put off until the middle of next month, giving rise to speculation the White House is delaying the bad news at least until Congress leaves town Aug. 7 on its summer recess.
Who is playing ball with Barack? Tim Geithner, Peter Orszag, Larry Summers, and Austan Goolsbee, along with every other member of his administration. No surprise. The question begs, though, who is playing defense to expose this purely partisan political stall tactic? (more…)
Hedge Fund Manager Responds to Barack’s Bullying
Posted by Larry Doyle on May 5th, 2009 11:41 AM |
Kudos to Zero Hedge for posting this commentary written by hedge fund manager, Clifford S. Asness. Major kudos to Mr. Asness for having the heart and courage to stand up for capitalism and free market principles. Asness addresses the implications of President Obama’s browbeating hedge funds’ representation and management of client interests involved in the Chrysler bankruptcy.
Our country was founded on the principles of free speech, fair and equitable trade, property rights, and the ability to operate without intimidation. In writing and publishing this post, Mr. Asness has done our country a great service. I commend him!! I strongly encourage people to share this message with friends and colleagues. Please share your sentiments here as well!! ~LD
Unafraid In Greenwich Connecticut
Clifford S. Asness
Managing and Founding Principal
AQR Capital Management, LLCThe President has just harshly castigated hedge fund managers for being unwilling to take his administration’s bid for their Chrysler bonds. He called them “speculators” who were “refusing to sacrifice like everyone else” and who wanted “to hold out for the prospect of an unjustified taxpayer-funded bailout.”
The responses of hedge fund managers have been, appropriately, outrage, but generally have been anonymous for fear of going on the record against a powerful President (an exception, though still in the form of a “group letter”, was the superb note from “The Committee of Chrysler Non-TARP Lenders” some of the points of which I echo here, and a relatively few firms, like Oppenheimer, that have publicly defended themselves). Furthermore, one by one the managers and banks are said to be caving to the President’s wishes out of justifiable fear. (more…)
“White House Ties to Wall Street Doom Bank Rescue”
Posted by Larry Doyle on April 17th, 2009 6:37 AM |
None other than Nobel Prize winner Joseph Stiglitz of Columbia University provided a direct shot across Washington’s and Wall Street’s bow today. As I read Bloomberg’s Stiglitz Says White House Ties to Wall Street Doom Bank Rescue, the little voice in my head kept repeating, “ he’s right” or “I agree.” I am reluctant to copy and paste entire articles, but this one is so important that I feel compelled and will add commentary or links as warranted.
The Obama administration’s plan to fix the U.S. banking system is destined to fail because the programs have been designed to help Wall Street rather than create a viable financial system, Nobel Prize-winning economist Joseph Stiglitz said.
“All the ingredients they have so far are weak, and there are several missing ingredients,” Stiglitz said in an interview. The people who designed the plans are “either in the pocket of the banks or they’re incompetent.”
The Troubled Asset Relief Program, or TARP, isn’t large enough to recapitalize the banking system, and the administration hasn’t been direct in addressing that shortfall, he said. Stiglitz said there are conflicts of interest at the White House because some of Obama’s advisers have close ties to Wall Street.
Seems as if Stiglitz would agree with How Wall Street Bought Washington.
“We don’t have enough money, they don’t want to go back to Congress, and they don’t want to do it in an open way and they don’t want to get control” of the banks, a set of constraints that will guarantee failure, Stiglitz said.
The return to taxpayers from the TARP is as low as 25 cents on the dollar, he said. “The bank restructuring has been an absolute mess.” (more…)
“Beholden to Failed Banksters”
Posted by Larry Doyle on April 9th, 2009 3:56 PM |
Any investor or manager with a degree of experience knows that the “first loss is the best loss.” What do I mean by that? Once the market detects a loss or a weakened position, the price for that asset will remain capped unless and until the asset is sold or liquidated. This price action occurs in every sector of every market.
Welcome to the world of global finance 2009. As banks, insurance companies, hedge funds, and other financial entities deal with losses, we see a lack of aggressive posture being taken on dealing with these losses. Why? Once moral hazard is violated with a single entity, every other entity will look to violate it as well.
Immediate losses are forestalled in hopes that they will be covered or disguised. However, every loss ultimately must be recognized. By whom and how is the question.
At this juncture, more of the losses in our financial system are being directed toward the taxpayers. How? Via the wide array of government programs. What is the cost? A likely underperforming economy due to a lack of credit, and higher taxes to offset lower revenues. (more…)
If Wall Street Wants a Fight, Obama Should…
Posted by Larry Doyle on January 21st, 2010 3:59 PM |
Earthquakes always lead to after-shocks.
With all due respect and sensitivity to the residents of Haiti, the earthquake felt in the Massachusetts Senate election on Tuesday has led to the after-shock dropped on Wall Street today by President Obama. Obama’s call to limit the size and risk-taking of Wall Street banks is meant to address the rage and anxiety of the American public. Any vision, however, will only be as effective as those commanders charged with its execution.
Who on Obama’s team will ultimately be in the position to execute this vision to reconstruct Wall Street? Tim Geithner, Ben Bernanke, Larry Summers, and Mary Schapiro. Each of these individuals is badly scarred as a result of the crisis that started on Wall Street and, in turn, crushed Main Street. (more…)
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Posted in Barack Obama, General, Obama Administration, Wall Street | 8 Comments »