Posted by Larry Doyle on May 19th, 2010 11:30 AM |
We’re different, right? The economic problems in Greece and other nations within the EU are their problems and not ours. Really? In my opinion, Americans are far too complacent regarding our economic problems. We shouldn’t be.
Will the economic, political, and civil waves of unrest rolling across Europe come ashore here in America? It is only a matter of time unless those in Washington charged with addressing the underlying issues take swift action. I have seen zero inclination and political will to do just that. Our Washington elite are so used to feeding at the trough that they would not know how to pull themselves away. How is America responding to these fat pigs?
Posted by Larry Doyle on February 13th, 2010 2:52 PM |
What will the future of Wall Street hold? No man is attracting more attention regarding that very question than former Fed Chair Paul Volcker. What might the Volcker Rule mean for Wall Street? For those with an interest in the global economy and markets, Volcker provided an extensive interview recently to the Financial Times.
In this interview, the former Fed chair talks more ‘sense on cents’ than anybody I have come across since launching this blog a year ago. I STRONGLY recommend reading it and saving it. Volcker’s interview will serve as a fabulous reference map as we collectively navigate our economic landscape.
Paul Volcker is seen as one of the wise men of American public life. As chairman of the Federal Reserve under Presidents Jimmy Carter and Ronald Reagan he subdued inflation, for which he is lauded today, although it was controversial at the time. After President Obama’s election, Mr Volcker was made chairman of the President’s Economic Recovery Advisory Board, a position which initially seemed largely ceremonial. But Mr Volcker returned to the centre of financial and economic debate last month when Mr Obama endorsed his proposed separation of commercial banking and proprietary trading, a plan dubbed the “Volcker Rule”. (more…)
Posted by Larry Doyle on December 14th, 2009 9:44 AM |
While those on Wall Street and Washington pretend to listen to the needs and concerns of middle America, they have been shown to be ineffective time and time again in developing and implementing sound financial practices and regulations. America is increasingly aware of just how deeply embedded and incestuous the Wall Street-Washington relationship has become. Who within this Wall Street-Washington circle “gets it?” Paul Volcker.
Volcker called out our financial and political operatives a few months back in calling for an effective reinstitution of Glass-Steagall to separate commercial and investment banking activities. I highlighted that call by writing, “Volcker Launches Bombshell on Wall Street and Washington.”
Although Wall Street and Washington may pretend not to hear Volcker’s shots across the bow, they do so at their own peril. Why? America listens and hears Volcker loud and clear. (more…)
Posted by Larry Doyle on September 17th, 2009 9:31 AM |
While the insiders on Wall Street and Washington pander about real financial regulatory reform, former Fed chair Paul Volcker yesterday hit ground zero on this hotly debated topic.
The heart of financial regulatory reform is centered on the implementation of leverage by our largest financial institutions. The leverage is exercised in a wide array of activities, both on and off-balance sheet. The capital utilized by the banks in these activities is credit that has not and will not flow directly through to the economy. Why? The banks believe that they will generate a greater return on the capital via proprietary activities rather than facilitating client business and addressing customer needs.
These proprietary activities, housed in balance sheet trading books and also in off-balance sheet SIV’s (structured investment vehicles), provided many nails in our economic coffin. While the Fed has provided the liquidity to refloat the markets (and to a lesser extent the economy), Wall Street banks are fighting hard to maintain as much of their proprietary activities as possible. Washington is largely dancing around the edges of the banks’ balance sheets in proposing financial regulatory reform. Until now. Paul Volcker hits Wall Street hard in promoting the end of the banks’ hedge fund like activities. The Wall Street Journal details Volcker’s bombshell in writing, Volcker Calls for Restricting Banks’ Risk, Trading Activity:
Former Federal Reserve Chairman Paul Volcker on Wednesday said banks should operate in a much less risky fashion, including not making trading bets with their own capital, comments that could provoke intensified debates over the future of financial regulation.
Mr. Volcker, who currently is chairman of the White House’s Economic Recovery Advisory Board, suggested banks should be restricted to trading on their client’s behalf instead of making bets with their own money through internal units that often act like hedge funds.
“Extensive participation in the impersonal, transaction-oriented capital market does not seem to me an intrinsic part of commercial banking,” he said in a speech to the Association for Corporate Growth in Los Angeles.
Mr. Volcker’s comments could put him at odds with the Obama administration’s proposal for new financial rules. The White House has called for more oversight of banks’ operations but doesn’t push such strict limits on what they do.
Believe me, the Wall Street lobby is working overtime to delay and dilute the impact of even the shallow regulatory reforms currently proposed by Washington. Volcker’s proposal would serve to dramatically change the very nature of how Wall Street operates. I welcome it on a number of fronts, as it would promote economic activity and financial intermediation, including: (more…)