Sense on Cents

Fannie, Freddie Summit Preview

Posted by Larry Doyle on August 16th, 2010 4:03 PM |

In June 2009, I highlighted the expectation of massive losses within Fannie Mae and Freddie Mac in writing Uncle Sam’s Dirty Little Secret. Fourteen months and hundreds of billions of dollars in losses later, America awaits to see how our ‘wizards in Washington’ will look to deal with these housing ‘wards of the state.’ Tomorrow, the Obama administration hosts the “Conference on the Future of Housing Finance.”

In anticipation of this conference, this past April the Obama administration had asked for input as to how our housing finance system might work. I wrote then (and would like to resubmit now), Sense on Cents Responds to Obama Administration Request for Input:

President Obama wants input on the reform of the housing finance system. Given my career, I consider myself eminently qualified to give it to him. Despite this request, though, I still think he should focus on job creation (which he highlighted during his State of the Union address).

I welcome giving President Obama, Treasury Secretary Geithner, and the rest of the the White House economic team a very healthy dose of Sense on Cents. (My response is a little lengthy, but it is not everyday the President gives us this opportunity. Out of respect, I owe him my best effort.) I will let you know if they respond with anything more than a form letter, or if they do not respond at all. From the U.S. Treasury today:

Obama Administration Seeks Public Input on
Reform of the Housing Finance System Read the rest »

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FINRA Gets New ‘Sheriffs’; Amerivet Proxy Proposals Approved!! Strongly Recommended

Posted by Larry Doyle on August 14th, 2010 12:14 PM |

Monday 8-16-10

I am continuing to keep this commentary as my lead post for three reasons:

1. I believe the potential impact of the developments in this story are enormous on the financial regulatory system in our nation.
2. This story received very little if any coverage outside of some industry newsletters.
3. Weekend traffic at blogs is considerably less than during the week.

I truly hope readers can fully appreciate the magnitude of the developments captured within this story. Sense on Cents’ pursuit of truth, transparency, and integrity took a giant step forward with the results of last week’s FINRA Annual Meeting. Have I piqued your interest? Read on and spread the word!! LD

Saturday morning in America!!

On this glorious morning on the east coast, I believe all Americans should be heartened by the results of the annual meeting held by Wall Street’s self-regulator, FINRA, this past Thursday. I remain convinced that FINRA as an organization remains an unknown entity to the overwhelming majority of the American populace. The results from this annual meeting may start to change that unfortunate reality. How so? Let’s navigate.

The Securities Industry Professional Association (The SIPA), long a thorn in FINRA’s side, actually trumped the FINRA release in highlighting the results of elections to the FINRA board of governors. Good for John Busacca and his colleagues at the SIPA in sending a strong message to FINRA that there are ‘new sheriffs in town.’ Yesterday the SIPA released,

SIPA Candidates Sweep FINRA Board Elections! Read the rest »

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What is The Real Rate of Unemployment in the United States?

Posted by Larry Doyle on August 13th, 2010 8:06 AM |

Just what is the true rate of unemployment in our country? Our headline U-3 rate is currently 9.5%. Our U-6 rate, more broadly defined, is 16.5%.

Many people are aware of the differences between U-3 and U-6; however, renowned economist John Williams takes our analysis to an entirely new level. Williams is far ahead of the curve in his work.

William is likely not a regular on the Washington cocktail circuit. Why’s that? He goes far deeper in his work and exposes inconsistencies, if not worse, in government statistics. Let’s learn more about Williams and his work at Shadow Government Statistics:>>>> Read the rest »

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Laurence Kotlikoff: “The U.S. Is Bankrupt”

Posted by Larry Doyle on August 12th, 2010 1:20 PM |

Nobody likes being told they are broke. While the truth may hurt, when you’re broke, you’re broke. Are we as a nation broke? Laurence Kotlikoff believes we are and expresses as much today in a Bloomberg commentary, U.S. Is Bankrupt and We Don’t Even Know It,

Let’s get real. The U.S. is bankrupt. Neither spending more nor taxing less will help the country pay its bills.

What it can and must do is radically simplify its tax, health-care, retirement and financial systems, each of which is a complete mess. But this is the good news. It means they can each be redesigned to achieve their legitimate purposes at much lower cost and, in the process, revitalize the economy.

Last month, the International Monetary Fund released its annual review of U.S. economic policy. Its summary contained these bland words about U.S. fiscal policy: “Directors welcomed the authorities’ commitment to fiscal stabilization, but noted that a larger than budgeted adjustment would be required to stabilize debt-to-GDP.”

But delve deeper, and you will find that the IMF has effectively pronounced the U.S. bankrupt. Read the rest »

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Bill Clinton Makes Case for Sense on Cents

Posted by Larry Doyle on August 12th, 2010 10:35 AM |

Bill Clinton could be a spokesman for Sense on Cents. How so? As 5 News in Ft. Smith-Fayetteveille, Arkansas attests, Bill Clinton Says Country In “Mess” In Part Due to Lack of Economic Education,

The biggest names in Arkansas politics, including President Clinton and Governor Beebe, stopped by Northwest Arkansas today to promote economic education. Today President Bill Clinton joined the state’s political and business leaders at the Economics Arkansas luncheon to celebrate growth in Northwest Arkansas and the importance of economic education. Read the rest »

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What Will We Learn from FINRA’s Annual Meeting on 8-12-10?

Posted by Larry Doyle on August 11th, 2010 12:20 PM |

Wall Street’s self-regulatory organization, FINRA, holds its annual meeting tomorrow inWashington D.C.. What will we learn? Will FINRA’s member firms vote for a number of non-binding proposals which would shine real light on the inner workings of this organization? America deserves to learn so much more than has ever been revealed about FINRA.

I have shared with many people that I believe the underlying tone of our markets would improve if FINRA were compelled to open its books and records. Why do I so strongly believe that? True transparency inherently breeds investor confidence. I made this very point to Joe Giannone of Reuters just the other day. Regular readers of Sense on Cents are fully aware of my feelings. Joe highlights the topics surrounding FINRA for a wider audience as he writes, FINRA Faces Calls to Lift Veil on Finances, Pay:

Wall Street regulator FINRA, which demands disclosure and openness from brokers, is under pressure to lift the veil on its own affairs.

The Financial Industry Regulatory Authority, a private corporation that regulates the nation’s 4,700 brokerages, will learns at its annual meeting on Thursday how many support a dissident’s call for more transparency. Read the rest »

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Caroline Herron’s Lawsuit Targets Fannie Mae’s Mismanagement of Mortgage Modification Program

Posted by Larry Doyle on August 11th, 2010 7:17 AM |

Have executives at Fannie Mae worked to benefit their own financial interests versus promoting the well being of American taxpayers and homeowners looking to permanently modify their mortgages? Is Fannie Mae merely a perpetual train wreck or has something even more nefarious gone on inside the halls of our national stepchild?

In recently reviewing The Center for Public Integrity, I was not shocked — but certainly dismayed — to read Whistleblower: Fannie Mae Bungled HAMP Anti-Foreclosure Program,

Fannie Mae executives bungled their stewardship of the federal government’s massive foreclosure-prevention campaign, creating a bureaucratic muddle characterized by “mismanagement and gross waste of public funds,” according to a whistleblower lawsuit by a former Fannie Mae executive and consultant. Read the rest »

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Ben Bernanke Is Running out of Ammo

Posted by Larry Doyle on August 10th, 2010 4:24 PM |

What if you were playing a round of golf with a set number of balls and were restricted by how often you might be able to use specific clubs? Might feel somewhat overwhelmed, no? What if you faced this predicament when you realized that you were still many holes away from the clubhouse? Might feel increasingly overwhelmed, no? Why do I have this mental image of Ben Bernanke and his fellow Fed governors standing out on the farthest point of a golf course wondering just how the heck they are going to finish their round–that is, navigate the economy–and get back to the clubhouse.

Let’s quickly review the Federal Reserve’s statement released today. In the process, let’s take the pulse of the economy and the Fed’s ability to impact it. From the Federal Reserve’s website, Read the rest »

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Calling All Auction-Rate Securities Holders

Posted by Larry Doyle on August 10th, 2010 6:42 AM |

Without information there can be no real truth. Without truth there can be no real justice. Without justice, what is the quality of our nation and ultimately our civilization?

Why do so many Americans remain enraged at the economic travesty of the last few years? For the very simple reason that those regulators who were charged to protect American investors not only failed in their initial charge but to a large extent have continued to fail investors by not aggressively pursuing justice where financial improprieties–if not outright fraud–transpired.

To this end, why am I not surprised that many auction-rate securities holders have quickly directed their attention and focus to the state of Colorado where securities commissioner Fred Joseph has filed a complaint against E*Trade for improperly marketing and distributing auction-rate securities. Other ARS holders are hoping Commissioner Joseph will take a similar tact on their behalf against other firms for the same reason.

In order for the Colorado state securities commissioner to pursue the truth, he needs the information. Read the rest »

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What Was Mark Hurd Thinking?

Posted by Larry Doyle on August 9th, 2010 3:39 PM |

High school kids do stupid things all the time. With little appreciation of the risks involved, stupid pranks or immature behavior can often have serious consequences. Hopefully by the time the high schooler heads off to college, the days of immaturity are in the rear view mirror. What is the lesson many high schoolers learn? Actions have consequences.

This lesson is certainly not restricted to those in high school. That said, how is it that a CEO of a Fortune 500 company, in this case Hewlett-Packard’s Mark Hurd, can engage in behaviors that lend themselves to those of high school sophomores?

There are real lessons in this professional soap opera for all of us. What do those lessons include? The Wall Street Journal addresses them in writing, Mark Hurd Neglected to Follow H-P Code,

Hewlett-Packard Co.’s standards of business conduct suggest that employees pose themselves a simple test to decide whether an action is appropriate: “Before I make a decision, I consider how it would look in a news story,” the document states. Read the rest »

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