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Kevin Dillon Meet Peter Sivere

Posted by Larry Doyle on July 8th, 2010 7:10 AM |

A recent headline in my local newspaper highlights a whistleblower case involving JP Morgan and an employee named Kevin Dillon. The article, JP Morgan Employee Files Whistle-Blower Lawsuit, details how Dillon was rebuffed while he attempted to report alleged accounting improprieties by a Texas based hedge fund, Highland Capital Management. This fund has a prime brokerage relationship with JP Morgan.

Dillon has brought suit against JP Morgan for alleged mistreatment as a result of his blowing the whistle. Dillon and JP Morgan are certainly not the only individuals and firms involved in an employee dispute over procedures and treatment. So, why am I writing about this case? For the very simple reason that Mr. Dillon will hopefully read my commentary and know that he is not the first individual involved in a whistleblower dispute with JP Morgan.

Regular readers of Sense on Cents may recall the story of Peter Sivere, a JP Morgan employee who blew the whistle on his employer for allowing after hours trading of mutual funds by a high profile hedge fund. In the process of performing his duties, Sivere engaged attorneys from the SEC. What happened in the midst of engaging these attorneys? Read the rest »


Baltic Dry Index Submerges

Posted by Larry Doyle on July 7th, 2010 12:39 PM |

What happens when consumer demand drops off a cliff as it has over the last quarter? Shipments of goods and raw materials will likely follow. How are those shipments measured? Let’s check in on trends and developments within the Baltic Dry Index.

The Financial Times highlights the fact that the BDI is submerging precipitously and writes today:

…worrying signals about the global recovery remained. The Baltic Dry Index, a gauge of dry bulk commodity shipping costs seen by many as a leading indicator for growth, fell for a 29th successive session to its lowest level for more than a year.

Here is a chart of the BDI relative to gold over the last 18 months:

That recent submersion of the BDI is clearly sending a strong signal as to the grinding halt of  the global economy.

Can you spell disinflation if not outright deflation? Start with BDI and go from there. In fact, given these developments in the BDI, I would expect that gold may have further downside from current levels.

LD

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“Hook ’em Horns” Saga Continues: Will State of Texas Sue Goldman Sachs, et al?

Posted by Larry Doyle on July 7th, 2010 11:40 AM |

Last week, I introduced readers to a developing story in the Longhorn state. I wrote Hook ’em Horns Complaint: State of Texas v. Goldman Sachs et al, highlighting a potential lawsuit on behalf of the great state of Texas against Wall Street. While some may view this lawsuit as a political football being kicked by Democratic candidate for Attorney General Barbara Ann Radnofsky, I would encourage people to look beyond that and appreciate that a wide array of respected professionals from a variety of backgrounds are endorsing this complaint. Additionally, I would ask those who view this as purely political whether they believe there was no fraud involved in our current economic crisis. To that end, how can you not possibly support a complaint that may bring a degree of transparency and integrity to a situation that has seen little to none of either of those virtues?

This developing story took another twist today as the following press release was put forth: Read the rest »


Kenneth Rogoff: “A Lot of Insolvent European Banks”

Posted by Larry Doyle on July 7th, 2010 5:30 AM |

Kenneth Rogoff

Should the European Union run bank stress tests or not? While that question has been hotly debated over the last few months, we received an answer today from one of the most highly respected economists in the world. Who might that be? Harvard’s Kenneth Rogoff, a Thought Leader and Sense on Cents Economic All-Star.

I have often referenced Rogoff’s work over the last eighteen months (go here) and hold him in the highest possible regard. So, about those European banks and the hotly debated stress tests? What does Rogoff think? Are you sitting down?

In a Bloomberg commentary, European Banks’ Hidden Losses Threaten EU Stress Test, we learn: Read the rest »


July 4, 2010: Remembrances and Celebrations

Posted by Larry Doyle on July 4th, 2010 9:02 AM |

Let’s take a day off from thinking about our steep slope and challenging terrain as we navigate the economic landscape. Today is a day of remembrances and celebration.

I remember the love and dedication my father-in-law had for our great nation. He would cherish this day as he would attend his local 4th of July parade to salute the nation he loved. Never one to complain about what our nation should do or could do, my father-in-law saw the beauty and opportunity provided by our great land and he embraced it. He appreciated the values and fiber that made our land the beacon amidst the storm. He resonated with real pride, and his deeply sincere and friendly demeanor were infectious. I love him and miss him. I hope those who read this can feel his pride and will share it. He truly represented the best of America.

I also remember my own Dad today. I will be visiting him in the hospital today as he deals with and recovers from recent surgery. His love of family, his determination, his integrity, and his ethic are the rocks and mortar on which every member of my family has forged our own lives. He speaks with such pride of his family and the stories of his descendants coming to this nation. His awe of his great grandfather Mike Doyle who came to this land as a teen from Ireland back in the mid-1800s is a motivating force for me and all my siblings. His signature farewell is “Keep punchin’.” He embodies real American spirit and virtues.

Behind great men, such as my father-in-law and my Dad, stand even better women. My mother-in-law and my Mom are the glue. As is my own beloved. I love these women.

What is the common thread here? Love. We love each other. We love our families. We love helping people. We love our nation. That to me is what the 4th of July is all about.

I hope you are able to share this day with your loved ones remembering and celebrating that which brings us together and makes us a proud and great land.

LD


Bill Gross Projects The ‘Threshold of Mediocrity’

Posted by Larry Doyle on July 3rd, 2010 7:31 AM |

Pimco’s Bill Gross, a Sense on Cents Economic All-Star, recently released his Investment Outlook for July 2010.  In my opinion, Gross is an outstanding writer with an uncanny ability to communicate effectively on a host of financial, social, and psychological topics from both a macro and micro standpoint. Given those skills along with the fact that he manages the largest bond fund in the world, “sense on cents” dictates that we ponder his words of wisdom.

These words focus on the structural changes at work in the world today, and how investors should brace themselves for returns that are on the ‘threshold of mediocrity.’

Gross writes:

Global financial market returns stand at the threshold of mediocrity. With bonds priced not for recession but near depression, most major global bond indices now yield less than 3%, surely a forerunner of returns to come. Read the rest »


“Hook ’em Horns” Complaint: State of Texas v. Goldman Sachs et al

Posted by Larry Doyle on July 2nd, 2010 12:42 PM |

Is America supposed to believe that the economic crisis emanating on Wall Street and costing our economy trillions of dollars was all on the up and up and was merely a ‘perfect storm’? Although many on Wall Street and in Washington would have us believe just that, a true measure of ‘sense on cents’ dictates that we not be so naive.

Regrettably, our financial regulators and most state attorneys general have shown themselves to be incapable, unwilling, or incompetent in pursuing the massive financial transgressions and fraud that lie at the foundation of our crisis. Well, it is time for “hook ’em horns!!”

The Democratic candidate for Attorney General in the great state of Texas, Barbara Ann Radnofsky, has written a Legal Complaint and Legal Brief which form the basis for a lawsuit against Wall Street and the underlying fraud which has brought our nation to its knees. Read the rest »


Review of Unemployment Report July 2, 2010

Posted by Larry Doyle on July 2nd, 2010 9:19 AM |

The release of the Unemployment Report this morning is very much consistent with an economy that is undergoing real structural changes and adjusting to the realities of lessened credit and limited growth. As much as some may like to spin it one way or another, those realities are the simple and straightforward ‘sense on cents’ views as we navigate our economic landscape. I do not envision these realities changing anytime soon.

A quick review:

1. The overall unemployment rate declined from 9.7% to 9.5% while the consensus expectation was for an increase to 9.8%. The underemployment rate declined from 16.6% to 16.5%. Are these positive developments? Nope. Why? The rates dropped as more people, in this case 652k workers, have given up looking for work and have exited the labor force.   Read the rest »


Wall Street Economist v. Rick Davis: Mano a Mano

Posted by Larry Doyle on July 1st, 2010 10:37 AM |

I love a good debate, or at the very least a healthy response to a challenging statement. I witnessed just such an exchange yesterday.

I shared my story, Rick Davis Nailed 1st Qtr 2010 GDP Report on November 30, 2009, with a noted Wall Street economist, with whom I am friendly and whom I hold in high regard. Recall that in the aformentioned story, I highlighted that Rick Davis of Consumer Metrics Institute is projecting a double dip recession with a 2nd Qtr 2010 GDP reading of -1.5% and a 3rd Qtr GDP reading of -2.0%.

In sharing that commentary with this well known economist, I received the following response: Read the rest »


Oppenheimer: Do the Right Thing, Redeem Your Auction-Rate Securities

Posted by Larry Doyle on June 30th, 2010 5:14 PM |

Q: Which full-service brokerage firm has NOT redeemed their clients stuck in auction-rate securities for the past 28 months?

Goldman Sachs, Morgan Stanley, Citigroup, Wachovia, Bank of America, Oppenheimer, TD Ameritrade, Fidelity, Merrill Lynch, UBS?

A: Oppenheimer & Company is the only one of these institutions that has not redeemed their private clients’ Auction-Rate Securities that were fraudulently marketed as “just like cash.”

OPPENHEIMER: DO THE RIGHT THING!!!

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 Oppenheimer clients.

LD


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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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