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SEC Oversight of Lehman, or Ignorance is Not Bliss

Posted by Larry Doyle on April 1st, 2010 9:42 AM |

Ignorance is never an excuse. Whether in regard to law enforcement, financial regulation, or other forms of supervisory oversight, ignorance may be the reality . . . but we can never allow it to be used as an excuse. Regrettably, ignorance (if not worse) was clearly on rampant display as the SEC (and in my opinion, FINRA as well) failed America miserably in its oversight of Lehman Brothers.

One of my favorite financial journalists, Bloomberg’s Jonathan Weil, highlights the pathetic performance of the SEC regulators who were charged with overseeing one of the firms that catapulted our economy off a cliff. Weil writes, Wall Street’s Repo 105 Cops Wake Up From Dead:

The good news this week from the Securities and Exchange Commission is that it’s on the hunt for companies that have used Lehman-style accounting tricks to make themselves look less leveraged than they really are. Now for the downside: The headline-chasing agency is way too late, as usual. Read the rest »


Deluxe Knowledge Quarterly “Open Invitation”

Posted by Larry Doyle on April 1st, 2010 7:10 AM |

I recently had an article published in the financial magazine Deluxe Knowledge Quarterly. I was asked to write on the topic of advice I would give to executives of financial intermediaries during these challenging economic times.

I think regular readers of Sense on Cents may detect a few common threads in my article. Please know that I do not merely write about these principles, but I truly believe them and continue to promote them.

Open Invitation

by Larry Doyle
Despite the fact that the economic crisis has clearly changed the nature of business and the expectations of our customers, many of us would love to revert to business as usual. This desire to default to the status quo is part of human nature. Consider how often we see this behavior displayed on Wall Street, in Washington and beyond. Read the rest »


March 2010 Market Review

Posted by Larry Doyle on March 31st, 2010 6:03 PM |

The 1st quarter 2010 returns are now in the books.

The Euro continued to lag given problems in the Euro-zone. That development supported our greenback:

The commodities index has given ground, but in the midst of that oil and copper have outperformed:

Although the equity markets started the year off on a rough note, the returns for the last two months have been impressive, albeit on generally light volume:

Bonds gave ground but remain within the trading range we have experienced all year:

LD


Gaming Uncle Sam’s Mortgage Modification Program

Posted by Larry Doyle on March 31st, 2010 11:08 AM |

A new release by the SIGTARP (Office of the Special Inspector General for the Troubled Asset Relief Program) is exceptionally enlightening in detailing how a likely significant percentage of those homeowners who entered the trial mortgage modification process gamed the system.

Once again, major high five to our friends at 12th Street Capital for sharing this report and providing insightful commentary. As 12th Street points out this morning:

With all of the hoopla surrounding the government and Bank of America announcements to push principal forgiveness to the top of the waterfall for mortgage modification triage, it would have been easy to miss the latest report from the SIGTARP (Special Inspector General of TARP). I have attached the report here and would encourage you to print it out and read it. Read the rest »


Erik Sirri and the Costs of a Politicized SEC

Posted by Larry Doyle on March 31st, 2010 6:27 AM |

When the exchange of financial ideas and, more importantly, capital becomes excessively politicized there are very real costs. Although those involved in the politicization process of these markets and exchanges may define the increased intervention of political influences as “in the best interests” of all involved, the supposed near term benefits come with long term costs.

Why do I broach this topic? A former SEC official decided he wanted to talk about the political overtones involved in the SEC’s decision to restrict short-selling in the equity markets in 2008. Bloomberg reports on this bombshell in writing, SEC Lets Politics Spur Short-Sale Decision, Sirri Says:

The U.S. Securities and Exchange Commission’s decision to restrict short selling was a political decision rather than one based on evidence, according to a former agency official who says it may set a precedent for future decisions. Read the rest »


U.S. Economy = “Walking Pneumonia”

Posted by Larry Doyle on March 30th, 2010 12:36 PM |

The other night in my conversation with Richard Davis on No Quarter Radio’s Sense on Cents with Larry Doyle, I defined my outlook for the U.S. economy in 2010 as the equivalent of  ‘walking pneumonia.’  What do I mean? Let’s look at today’s economic releases, Consumer Confidence and Home Prices.

Although pundits may want to promote the rebound in these statistics as a harbinger of economic health, I personally do not think we will see these measures running away from us anytime soon. Have you ever had ‘walking pneumonia?’ I have. You don’t move all that quickly. At times, you wonder what the hell is wrong with you. Welcome to the Uncle Sam economy 2010. Read the rest »


Financial “Family” Collusion Will Likely Increase

Posted by Larry Doyle on March 30th, 2010 9:18 AM |

What will be the next explosion in financial chicanery if not outright fraud? Collusion, that is price fixing. Why? A number of reasons, including:

1. The financial industry has become an oligopoly, (some may say cartel) thus setting the table for increased collusion to propagate.

2. Lower volumes across exchanges, which pressure revenues and incentivize market participants to collude to generate greater profits. Read the rest »


Has Oppenheimer Already Violated Its Auction-Rate Settlement with NY AG Cuomo?

Posted by Larry Doyle on March 29th, 2010 1:08 PM |

Is the great lie and fraud encompassing the auction-rate securities fiasco continuing even into the settlement process? Information, or the lack thereof, indicates it is. In the process, the injustice served cold to the thousands of ARS investors, especially those who purchased these so-called ‘cash’ instruments from Oppenheimer Holdings, continues.

Wall Street, Washington, and the bulk of the financial media (exceptions being author Phil Trupp, Bloomberg’s Susan Antilla, and the Washington Examiner’s Marta Mossburg) would prefer to keep the ARS fraud and fiasco neatly under the rug. I have no interest in allowing the fraudulent ARS perpetrators and their financial regulators any degree of comfort in this mess. Read the rest »


How Can Rick Davis Project 2nd Qtr GDP at -1.5%? This is a MUST Read, Listen, Learn!!

Posted by Larry Doyle on March 29th, 2010 7:17 AM |

If the American consumer represents 70% of our economy, shouldn’t economists study consumer spending as much as possible? Well, one individual, and he is not a trained economist,–he is actually a physicist by trade– has done and is doing just that. Who is this visionary? Richard C. Davis of the Consumer Metrics Institute.

I hosted Richard on my radio show, No Quarter Radio’s Sense on Cents with Larry Doyle Welcomes Rick Davis, last evening. If you have any interest in the economy (and if the economy is even peripherally linked to the markets), you MUST listen to this interview. Those who follow my work know I am not one taken to hyperbole, but last evening’s show was as good as it gets in terms of cutting edge analysis on the economy focused specifically on the consumer. Read the rest »


March 28, 2010: Economic/Market Week in Review

Posted by Larry Doyle on March 28th, 2010 10:55 AM |

The hits just keep on coming. The news on Wall Street, Washington, and literally all around the world is an absolute onslaught. This avalanche of news (healthcare reform, Greece and the EU, China and currency manipulation, South Korean naval ship sinks with speculation of possible North Korea involvement, Israeli tensions with Palestine and Washington, Treasury debt supply pressuring interest rates, and on and on) can overwhelm us if we allow it. Global political and economic risks abound. These risks demand that we keep a balanced perspective as we navigate the economic landscape.

Welcome to our Sense on Cents Week in Review where I provide a streamlined recap of the major economic data and news, along with month-to-date market returns. 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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