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E*Trade: “E”xemplary or “E”gregious??

Posted by Larry Doyle on July 16th, 2010 8:42 PM |

QUESTION: What does the “E” in E*Trade Securities LLC really stand for?

ANSWER: Choice 1 or 2

1: Exemplary…….. If they announce how they will redeem their client’s funds still frozen after 30 months in Auction Rate Securities.

2: Egregious……… if they fail to rescind or redeem all of the Auction Rate Security purchases that some of their brokers fraudulently solicited in 2007, by failing to disclose the risks and potential lack of liquidity, and marketing them to be as safe as cash equivalents or money market funds.

As of now, E*Trade is in a race to the bottom amongst all of its peers in failing to even address the problem or work towards a solution. Does E*Trade have no integrity whatsoever? Come on E*Trade, do the right thing!!

MAKE YOUR ARS CUSTOMERS WHOLE!!!

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On behalf of auction-rate securities investors everywhere, I am happy to run this ad here at Sense on Cents. This specific ad was submitted by a group of E*Trade clients. – LD


Insiders’ Views on Financial Regulatory Reform

Posted by Larry Doyle on July 16th, 2010 1:02 PM |

What do industry insiders think of the Financial Regulatory Reform package coming out of Washington? The Wall Street Journal provides a fascinating review in Fed Gets More Power, Responsibility. Let’s navigate.

1. Henry Paulson
Former Treasury secretary
Grade: Incomplete
The systemic-risk council, tougher Fed regulation over top financial institutions and new authority to wind down failing institutions are essential steps forward. Improving derivatives rules is a real positive. But the bill doesn’t tackle Fannie and Freddie, and there are too many unknowns as to how the regulations will be applied.
Will it help prevent another crisis? Read the rest »


The Only Real Question Regarding Goldman’s Settlement with the SEC

Posted by Larry Doyle on July 16th, 2010 7:34 AM |

Who’s next?

We can debate all day long whether the settlement of SEC charges against Goldman Sachs for $550 million is fair or not. While that debate will occur all over Wall Street and throughout the world of global finance today, the question regarding the size of this settlement is not important in and of itself. I am not saying that $550 million is not a lot of money. Nor am I saying that Goldman may be getting off easy. The only question I have is, “Who’s next? ”

Are we to think that the Goldman Abacus-CDO transaction is the only ABS-backed CDO that employed improper marketing? Do not be so naive. In fact, if Goldman employed improper marketing in one deal, are we to believe they did not do the same in many others? Do you ever find just one mouse? Read the rest »


Sense on Cents Commends JP Morgan for Standing Up for Long-Term Investors

Posted by Larry Doyle on July 15th, 2010 1:24 PM |

Why are investors increasingly less comfortable putting capital to work in the market? Why are investors increasingly less confident in the very structure of the marketplace itself?  The simple fact is the supposed technological advancements embedded in high frequency trading have come with very real costs for long-term investors. The biggest advocate for investors in addressing these real costs has been Themis Trading’s Joe Saluzzi. I interviewed Joe twice over the last year and have referenced his work often. I commend Joe for often being the lone wolf within the industry crying out on these critically important issues.

Well, Joe now has company in the form of a very, very, very large wolf. Who might that be? None other than JP Morgan. Thanks very much to a regular reader of Sense on Cents for pointing out a story, JP Morgan’s Views On The Five Best Things About the Flash Crash, that ran yesterday at the fabulous site Zero Hedge. Read the rest »


Ron Rhoades: “Six Reasons Why FINRA Should Be Dismantled”

Posted by Larry Doyle on July 15th, 2010 11:21 AM |

Regular readers of Sense on Cents are well aware of the multiple issues I have highlighted regarding Wall Street’s self-regulatory organization, FINRA. Allegations of front-running the auction-rate securities market, allegations of investing its own funds in Madoff, misrepresentations (i.e. lying in a proxy statement) in the document used for the very formation of the FINRA organization, and ultimately an incestuous relationship with the industry, I have not been bashful in highlighting what I deem to be critical failings, if not potentially much worse, within this organization.

A good friend of Sense on Cents, Ronnie Sue Ambrosino (who just so happens to be a lead spokesperson for Madoff investors), shared a very interesting commentary regarding FINRA. The writer, Ron Rhoades, offered his thoughts on FINRA yesterday at RIABiz, a website which promotes itself as providing “voice, news, and vision for the advisory (registered investment advisors) community.”

Ron holds nothing back in addressing the question of the fiduciary standard within investment management. Read the rest »


Rick Davis Explains ‘Double Dip’ Dynamics

Posted by Larry Doyle on July 15th, 2010 7:30 AM |

Are you sitting down?

Rick Davis recently wrote, “Unless the economy begins to pick up quickly, a double dip is likely — with the second round milder but lingering longer than the first.” How can our Sense on Cents Hall of Famer make this projection?

Rick sheds tremendous insights on the credit contraction ongoing and seemingly worsening in our nation’s economy. Davis paints a cogent picture as to how we are within weeks of the 2010 economic slowdown being worse than the 2008 recession at the same point in the cycle. You think I’m exaggerating? Hats off again to the fabulous work done by Rick Davis at Consumer Metrics Institute. Let’s navigate.

July 13, 2010 – Behind the Credit Numbers:

During the past week there has been a flurry of Federal Reserve reports and commentary concerning the levels of credit in the current economy. The two most notable were: Read the rest »


Fed Minutes Flashing Caution

Posted by Larry Doyle on July 14th, 2010 3:24 PM |

The Federal Reserve just released the minutes from a June 22-23 meeting and an early May conference call. The Fed as an institution is always careful in its delivery, but in reading through their tea leaves this afternoon I sense concern on the Fed’s part of a real  slowing, if not a double dip, in our economy. A summary of the Fed minutes includes the following highlights:

FOMC participants’ forecasts for economic activity and inflation suggested that they expected the recovery to continue and inflation to remain subdued, but with, on balance, slightly weaker real activity and a bit lower inflation than in the projections they made in conjunction with the April 2010 FOMC meeting. Read the rest »


Report Points to Double Dip in Housing

Posted by Larry Doyle on July 14th, 2010 2:01 PM |

While economists and analysts are aggressively debating whether our nation’s overall economy is poised for a double dip, one firm is not bashful in highlighting that our housing market specifically is beginning to slide down the slippery slope of a double dip. Thank you to our friends at 12th Street Capital for bringing this report to our attention.

Housing Wire, a leading financial website providing news on the mortgage market, highlights the following report, Economist Reports the Housing Market Double Dip Is Beginning:

Toronto-based Capital Economics, an independent macroeconomic research firm, said Tuesday that a double dip in the United States housing market is now materializing. Read the rest »


America Speaks Its Mind in Bloomberg National Poll

Posted by Larry Doyle on July 14th, 2010 6:09 AM |

Will the financial regulatory reform measures soon to be passed on Capitol Hill prevent another economic crisis? No, that is not a trick question.

An overwhelming percentage of Americans have little to no confidence that the proposed financial regulatory reforms will prevent another crisis. That gem, and many others, are included in a recently released Bloomberg poll. A brief overview of the poll results is displayed in the following chart (click on image to enlarge):

I STRONGLY encourage you to delve deeper into the poll questions. On a number of the questions, I found myself saying, “Wow, are you kidding me..” as to the strength of feelings and emotions running through our nation today. Read the rest »


Boston Fed President Concerned About Economy and Deflation

Posted by Larry Doyle on July 13th, 2010 2:50 PM |

Nothing like a cold shower from a fellow Bostonian to dose the spirits of what has been a solid 5% rally in the markets over the last week. To what do I refer? Boston Fed President Eric Rosengren sends a cold shiver across the bow of our economic landscape in a recent interview with The Wall Street Journal.

Rosengren specifically sends a note of real caution in terms of his economic outlook, concerns about deflationary trends, a lack of improvement on the jobs front, and the potential need for more quantitative easing on behalf of the Fed. This interview is relatively brief, but it provides a wealth of sense on cents.  Read the rest »


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Larry Doyle

Larry Doyle A Wall Street veteran's views and instincts on the markets, economy, and all things financial.







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