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Greek ‘Drama’ Only in First Act, or ‘Beware of Greeks Bearing Gifts’

Posted by Larry Doyle on April 6th, 2010 1:42 PM |

Prior reports that Greece’s financial problems are now in the rear view mirror are exceedingly premature.

As we navigate ‘across the pond,’ we learn that the Financial Times’ Wolfgang Munchau believes Greece Is Going to Default but Not This Year:

Greece will not only have to make an extremely large public sector deficit reduction effort but it will also have to do this under a condition of disinflation, and possibly deflation, which would push its nominal growth rate to negative levels during the adjustment period. That, in turn, would jeopardise the debt reduction programme of both the public and private sectors. Under those circumstances, there is no way that Greece could ever stabilise its debt-to-gross domestic product ratio, no matter how hard the government of George Papandreou tries.

To get out of this mess, one of five things will have to happen. Read the rest »


Public Pension Ponzi Schemes

Posted by Larry Doyle on April 6th, 2010 10:50 AM |

Making promises that can’t be kept.

Garnering support via payback, if not kickbacks.

Effectively misrepresenting expected returns.

Am I talking about Bernie Madoff and every other con artist who has ever perpetrated a Ponzi scheme? No, although I could be. I am addressing the reality of the public pension system in our country. Those participating in public pensions can rail on me all they want. The simple fact is the power and leverage of the public unions combined with the willingness of public officials to sell their souls, while mortgaging our children’s futures, have created a massive gap in the funding of public pension liabilities in our nation today. Read the rest »


Caution: The Market Looks Dangerously ‘Overbought’

Posted by Larry Doyle on April 6th, 2010 8:48 AM |

Is the equity market overbought? Am I supposed to be allocating capital to the equity market after this enormous runup? Is there value in the market, or is this simply one massive momentum trade? Why is overall equity volume so light? Is that an indicator that the market is operating on borrowed time?

All great questions. If I had the exact answers and told you so, I’d be a certifiable liar. These questions can only be addressed on a relative basis. On that note, one of the best measuring sticks that I’ve always used in assessing overall market strength and direction is known as Relative Strength Index, or RSI. What is that? Read the rest »


Simon Johnson Provides Mega-Sense on Cents

Posted by Larry Doyle on April 5th, 2010 2:02 PM |

Is the Wall Street landscape 2010 merely a precursor to another systemic crisis in which the “too big to fail” banks come running to Uncle Sam for more bailouts? Selected senior bankers on Wall Street, including JP Morgan’s Jamie Dimon, have publicly stated that the markets and our economy need to ready themselves for crises on a more regular basis. If that is the case, is this truly any way to run a financial system, let alone a country? I do not think so, nor does Simon Johnson. Who is Johnson? Read the rest »


The Reflation Bill Is Outstanding and Growing

Posted by Larry Doyle on April 5th, 2010 11:13 AM |

If we are to believe the markets are predicting a rebound in the economy (I do not blindly accept that to be the case), then it is high time we address the next enormous question facing our country. That is? The bill that has been accruing for the ‘so-called’ saving of our economy.

Whether the economy has been saved or not is a relative question. Please be careful as to how to use that phrase in light of the fact that there are 6.5 million people out of work now for at least 27 weeks (long term unemployed) and close to 17% of our labor force is underemployed.

The biggest question facing our country now is how do we pay for cleaning up this mess that was created over the last number of years?  Read the rest »


Robert Reich: “No Jobs Recovery”

Posted by Larry Doyle on April 5th, 2010 8:29 AM |

Where is the jobs growth? If we listen to many in Washington or the general media, Friday’s employment report (indicating +162k in non-farm payroll) was a turning point in our labor markets. Was it really? Let’s listen to former Labor Secretary Robert Reich and get his take.

Although I have a decidedly different point of view than Reich on many economic and political topics, I do believe that Reich speaks from his heart and presents what he believes to be the truth as opposed to sugarcoating data to further promote a political agenda. Read the rest »


May the Road Rise Up to Meet You

Posted by Larry Doyle on April 3rd, 2010 7:26 AM |

I have told countless people that my real goal with Sense on Cents is for anybody and everybody who comes to this site to feel more informed or more educated on financial, economic, or market-related issues when they leave.

This weekend is a time for family and friends. I hope you have the opportunity to spend time with your immediate or extended loved ones appreciating the most priceless of all assets: quality relationships.

If you have some downtime and want to navigate Sense on Cents, there are lots of different ‘trails’ here including Newsworthy articles, Financial Primers (right sidebar), Economic All-Stars (left sidebar), Career Planning materials, past shows of No Quarter Radio’s Sense on Cents with Larry Doyle, or utilize the ever expanding library of past commentaries by referencing your desired topic in the search window in the upper right.

If you care to mention to your family and friends, “You know, I have come across this pretty cool site called Sense on Cents,” I’d be most grateful.

No Quarter Radio’s Sense on Cents with Larry Doyle will return next Sunday evening.

If you are traveling, please be safe.

Thanks for your continued support. I will leave you today with perhaps the most cherished of Irish blessings:

May the road rise up to meet you.

May the wind be always at your back.

May the sun shine warm upon your face;
the rains fall soft upon your fields and until we meet again,

May God hold you in the palm of His hand.

LD


Unemployment Report: April 2, 2010

Posted by Larry Doyle on April 2nd, 2010 8:56 AM |

The widely anticipated April Unemployment Report covering the month of March was just released. Let’s dive right in and take a look at the numbers . . .

I. UNEMPLOYMENT RATE
December: 10%
January: 10%
February: 10.1%
March: 9.7%
– April Consensus Expectation: 9.7 %
– April Actual: 9.7%

>> LD’s comments: as expected. More people who had given up looking for work have now reentered the labor force. This trend will keep pressure on the rate. The U-6, that is the underemployment rate inched higher to 16.9% from last month’s 16.8%. What about the long term unemployed?  Read the rest »


Robert Reich, “The Fed in Hot Water”

Posted by Larry Doyle on April 1st, 2010 5:14 PM |

Former Clinton Secretary of Labor Robert Reich had some very strong words today for the Federal Reserve. In his commentary which I find at Wall Street Pit, Reich questions the constitutionality of the Fed’s actions in 2008. None of this comes as a surprise, but it should cause America to wake up to the fact that the Wall Street-Washington incestuous relationship has run roughshod over America before and now throughout our economic crisis.

Who in Washington is willing to blow the whistle on this incest? Reich writes, The Fed in Hot Water:

The Fed has finally came clean. It now admits it bailed out Bear Stearns – taking on tens of billions of dollars of the bank’s bad loans – in order to smooth Bear Stearns’ takeover by JPMorgan Chase (JPM). Read the rest »


Do Not Wait to Refinance

Posted by Larry Doyle on April 1st, 2010 11:30 AM |

If you are in a position to refinance your mortgage, I would not wait. Why?

The largest buy program in the history of the U.S. mortgage market just ended yesterday. That program, part of the Federal Reserve’s quantitative easing, purchased $1.25 trillion in mortgage-backed securities. In the process, the Fed brought mortgage rates down somewhere in the vicinity of .50% to a full 1% from where they would likely otherwise be. 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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