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New York Fed and Treasury Tell Banks to Hold Cash

Posted by Larry Doyle on March 10th, 2010 2:36 PM |

How often have Americans heard politicians screaming at banks for not providing credit? How often have those same politicians and bank regulators informed us that they are working to have banks inject money into the economy to support Main Street?

Regrettably, America deals with this pandering and posturing from our political leaders and regulators all too often. While Americans are being told one thing, what are the regulators telling the banks? Hold cash.

I am not shocked, but certainly disappointed, that American financial periodicals failed to run this story detailing these recommendations from our bank regulators. The London based Financial Times highlights this bombshell in writing, Regulators Tell U.S. Banks to Hold Funds: >>>> Read the rest »


CT AG Blumenthal Suing Rating Agencies

Posted by Larry Doyle on March 10th, 2010 1:22 PM |

When investors lose their shirts, what is the next thing that happens? They get pissed. Then what? They call their lawyers and file lawsuits. While individual firms on Wall Street face lawsuits all the time, it is not often that the institution of Wall Street itself is sued.

In late January, we witnessed a massive lawsuit filed on behalf of the Federal Home Loan Bank of Seattle against a large number of Wall Street banks. To reference that suit, read here. Today, The Wall Street Journal highlights Connecticut Attorney General Richard Blumenthal to Sue Moody’s, S&P, the pillars of the Wall Street ratings game:

Connecticut Attorney General Richard Blumenthal will announce a lawsuit Wednesday against rating firms Moody’s Investors Service and Standard & Poor’s alleging that they knowingly assigned “tainted ratings” for “risky investments” backed by subprime loans. Read the rest »


Lower Book Value of Banks Highly Correlates with Smoke and Mirrors

Posted by Larry Doyle on March 10th, 2010 11:05 AM |

Why do some banks seem to trade at cheap, if not depressed, levels?

Investors do not trust the valuations of the assets on the books of these banks. I highlighted this very point the other day in writing, “Where is Wall Street Hiding Hundred Plus Billion in Lo$$es?”

A recently released report from the American Banker addresses this point of questionable asset valuations, or what I define as ‘smoke and mirrors’. Read the rest »


CAUTION: SIPC Impostor Luring Madoff Investors

Posted by Larry Doyle on March 9th, 2010 2:22 PM |

There is never a lack of scumbags in the world who prey upon those in distress.

As if those crippled by the Madoff scam have not already gone through hell and back, today we learn that an impostor to the Securities Investor Protection Corporation (SIPC) has sprouted up targeting the investors victimized by the Madoff scam. The Wall Street Journal exposes this scum in writing, Copy-Cat Web Site Targeting Madoff Victims:

The Securities Investor Protection Corp., a securities industry group formed by Congress to help customers of failed brokerages, warned of an imposter Web site mimicking its own page to target victims of convicted swindler Bernard Madoff. Read the rest »


Wall Street Journal Book Review Unfairly Slams Harry Markopolos

Posted by Larry Doyle on March 9th, 2010 12:04 PM |

People in glass houses should not throw stones.

That simple piece of wisdom is both timeless and precious. Regrettably, too many in our media fail to uphold it. Where do I see evidence of it today?

The Wall Street Journal today runs a book review of Harry Markopolos’ recently released No One Would Listen. The reviewer is Richard J. Tofel of ProPublica, a nonprofit investigative-journalism newsroom. Tofel does not denigrate Harry’s work, but he emasculates Harry from a personal standpoint. Read the rest »


Using Derivatives ‘Like Hard Drugs’

Posted by Larry Doyle on March 9th, 2010 9:16 AM |

Prescription drugs can only be accessed through a physician for a reason.  When used appropriately under the guidance of an ethical and informed doctor, the powers of prescription drugs can be life-changing and life-saving. When these prescription drugs are marketed by those more interested in their own bottom line than the health and well-being of their ‘patients’, then use often turns to abuse and the effects are crippling.

A similar dynamic plays out in the high and mighty halls of international finance. Read the rest »


Where is Wall Street Hiding Hundred Plus Billion in Lo$$es?

Posted by Larry Doyle on March 8th, 2010 11:24 AM |

U.S. Rep. Barney Frank (D-MA)

Banks are increasingly healthy, right? Our nation’s accounting rules promote real transparency and integrity in our financial reporting, right? Housing is bottoming, right? No, no, and no!

Why so pessimistic, you may ask? I am not pessimistic at all. I am merely searching for the truth in the midst of the smoke and mirrors on Wall Street and in Washington.

Thank you to our friends at 12th Street Capital for sharing a recently released letter from Congressman Barney Frank imploring the four largest banks involved in mortgage originations to write off second liens they are holding on their books at inflated values.

Why does Congressman Frank believe these loans need to be written off? Read the rest »


Another Oppenheimer ARS Investor Unloads on New York AG Cuomo

Posted by Larry Doyle on March 8th, 2010 8:12 AM |

Investors defrauded in the distribution of auction-rate securities deserve a voice. Sense on Cents is happy to provide it. Aside from feeling screwed by Wall Street banks and money managers in the distribution of auction-rate securities as a cash surrogate, investors now feel increasingly incensed by the lack of support in the judicial system and in selected attorneys general offices in our country.

The latest AG to feel the wrath of ARS investors is New York AG Andrew Cuomo for his recent settlement with Oppenheimer Holdings. Rather than reading my opinion of Cuomo’s settlement, let’s listen to an investor (who remains nameless for obvious reasons). In my opinion, this individual’s letter speaks volumes and echoes the sentiments of thousands of investors who continue to hold the $150 BILLION in frozen ARS. Read the rest »


No Quarter Radio’s Sense on Cents with Larry Doyle Welcomes Daryl Montgomery

Posted by Larry Doyle on March 7th, 2010 8:12 AM |

UPDATE: This episode of NQR’s Sense on Cents with Larry Doyle has concluded. You can listen to a recording of the episode in its entirety by clicking the play button on the audio player provided below. Once the audio begins, you can advance or rewind to any portion of the episode by clicking at any point along the play bar.

************************

Raise your hand if you do not trust Wall Street and Washington.

Raise your other hand if you do not trust the financial media.

Why do I viscerally envision a lot of hands being raised all over America? Because given developments of the last few years, Americans — at an ever increasing rate — are less trusting of Wall Street, Washington, and the media.

What is one to do? Where can one go to embrace honest dialogue focused on real transparency and integrity? You have come to the right place as tonight from 8-9pm ET No Quarter Radio’s Sense on Cents with Larry Doyle Welcomes Daryl Montgomery.

Daryl Montgomery is the organizer of the New York Investing Meetup, a group of 2500 independent investors and traders that provides the public with unbiased economic and market information. Read the rest »


Barron’s Highlights FINRA’s Stench

Posted by Larry Doyle on March 6th, 2010 8:01 PM |

The stench surrounding FINRA is attracting real attention.

The executives of Wall Street’s self-regulatory organization FINRA should not think that the recent dismissal of one legal complaint is reason for celebration. Why? Those who care for transparency measure success not in terms of judicial victories but to a much greater extent by public pressure and awareness. On that note, at long last real progress in creating transparency into FINRA is occurring.

From the highly regarded government watchdog Project on Government Oversight to now the leading weekend business periodical Barron’s, FINRA’s stench is attracting attention from more than the blogosphere and a few selected journalists (Bloomberg’s Susan Antilla, The Washington Examiner’s and Baltimore Sun’s Marta Mossburg, and also Barron’s Jim McTague).

The news in an article this weekend by Barron’s is not news to regular readers of Sense on Cents, but to most of America FINRA remains a foreign entity. Those days are changing.  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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