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Elizabeth Warren Exposes Jamie Dimon

Posted by Larry Doyle on February 9th, 2010 8:37 AM |

Elizabeth Warren and Jamie Dimon

Elizabeth Warren and Jamie Dimon

How is it that some people are able to aggressively promote the virtues of truth, transparency, and integrity within our financial system while others would seem to talk a good game but do not truly walk the walk? The key, in my mind, is that the former are not beholden to a constituency focused on short term maximization of profits and revenues. Who is distinguishing herself as a leader in this category? Elizabeth Warren, the current chair of the Congressional Oversight Panel to investigate the U.S. banking bailout.

Warren writes in today’s Wall Street Journal of Wall Street’s Race to the Bottom. This race is very much a function of implementing strategies and developing products that have served to maximize the short term revenues of these firms, while eroding the very foundation of the financial system itself. Read the rest »


The Case for Student Vouchers

Posted by Larry Doyle on February 8th, 2010 2:00 PM |

Who would not make an investment that can generate a 20% better return at half the overall cost? The appeal of this investment is that it pays increasing dividends in the future. Are you interested? You should be because your tax dollars are being spent at an ever increasing rate to fund a lower returning investment at a higher cost, without the benefits of future dividends but the reality of higher social costs.

I am referring to my major interest in the use of student vouchers for the funding of secondary education. Time and again I come across stories of urban families who are desperate to get their children well educated in hopes of moving on to a better life. These hopes are evidenced by the overwhelming demand for admission to a charter school or access to a student voucher.

Regrettably, the teachers’ unions in our country maintain a stranglehold on the futures of many of our urban youth. How so? The unions’ support for the Democratic Party comes with the price tag of limiting both charter schools and the use of vouchers. What a shame! Read the rest »


Greenspan: U-Shaped Recovery

Posted by Larry Doyle on February 8th, 2010 11:30 AM |

Alan Greenspan is certainly not viewed in the same light now as he was during a large part of his tenure as chairman of the Federal Reserve. That said, when the former Fed chair speaks, people do listen. What is he saying now? Greenspan is throwing some cold water on the topic of a V-shaped economic recovery. Bloomberg highlights his views this morning in writing, Greenspan Sees ‘Slow’ Recovery, Is ‘Concerned’ if Stocks Drop:

Former Federal Reserve Chairman Alan Greenspan said a U.S. economic recovery is “going to be a slow, trudging thing,” and that he “would get very concerned” if stock prices continue to fall. Read the rest »


When Will Our Economy Return to Normal?

Posted by Larry Doyle on February 8th, 2010 8:18 AM |

The question most asked in economic circles is, “How and when will our economy return to normal?” My response is always, “What is normal?”

I find it most impactful to explain to people looking to gain a greater understanding of our economy and our markets that the normal economy of the late ’90s through 2007 was driven by the shadow banking system. This shadow banking system provided upwards of 40-45% of the total credit employed by our economy.

The shadow banking system incorporated the credit origination, securitization, and distribution businesses of Wall Street investment banks as opposed to the traditional lines of credit provided by commercial banking activities.

The crisis on Wall Street 2008 brought this shadow banking system to a virtual standstill. While it has begun to resuscitate itself, it remains a mere shadow (no pun intended) of its former self. What is the result? Read the rest »


February 6, 2010: Market Week in Review

Posted by Larry Doyle on February 6th, 2010 7:37 AM |

Global risks remain high. Global supports remain strapped. What are the results? Markets remain volatile and skittish. Why? Our global economy along with our domestic economy remain under the pressure of massive debts and deficits across the sovereign, corporate, and consumer spectrum.

Global governments can not prop economies and markets forever, try as they might. Can 2010 successfully transition from these total government supported and propped markets to a hoped for return to private enterprise with private capital? The year to date results of this transition are not pretty. We remain a long way from being out of the woods. Pack lightly and lets navigate.

Welcome to our Sense on Cents Week in Review where I provide a streamlined recap of the major economic news and month-to-date market returns. Read the rest »


SBA Bailing Out Some CRE?

Posted by Larry Doyle on February 5th, 2010 2:17 PM |

What is the mission of the SBA, the Small Business Administration?

The U.S. Small Business Administration (SBA) was created in 1953 as an independent agency of the federal government to aid, counsel, assist and protect the interests of small business concerns, to preserve free competitive enterprise and to maintain and strengthen the overall economy of our nation. We recognize that small business is critical to our economic recovery and strength, to building America’s future, and to helping the United States compete in today’s global marketplace. Although SBA has grown and evolved in the years since it was established in 1953, the bottom line mission remains the same. (LD’s highlight) Read the rest »


When Will Euro-PIGS Fly?

Posted by Larry Doyle on February 5th, 2010 10:56 AM |

Wall Street has more than bulls and bears. Trading desk banter often refers to the presence of ‘pigs’ in the market. Years removed, I can still hear traders saying, “this market’s a pig,” “this bond’s a pig,” and “that account is a pig.” Well, with my morning coffee I saw a new utilization of this famed reference. I chuckled but also realized the seriousness of the new pig reference in regard to the increasingly dire fiscal situation in the European Union.

What are the PIGS across the pond? Portugal, Italy, Greece, and Spain.

The Wall Street Journal highlights the disastrous fiscal situation in these countries in writing, Sovereign Risk Meets Sovereign Reality:

After months of shrugging off debt problems in Dubai, Greece and other smaller economies, markets yesterday seemed suddenly aware of the risks of sovereign default. Read the rest »


Unemployment Report: February 5, 2010

Posted by Larry Doyle on February 5th, 2010 8:58 AM |

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

I. UNEMPLOYMENT RATE
August: 9.4%
September: 9.7%
October: 9.8%
November: 10.2%…revised to 10.1%
December: 10%
January: 10%
– February Consensus Expectation: 10.1%
– February Actual: 9.7%

>> LD’s comments: A fluke. A drop in the rate would typically be viewed as a positive, but then why didn’t we see job growth? Today’s report indicates that a lot of people have given up looking for work, thus shrinking the overall labor pool.  The U-6 (the underemployment rate) is now 16.5%. Better? Don’t be fooled. I think it is again more an indication that people are exiting the labor force overall. Read the rest »


FINRA Board to Address Allegations of Schapiro Misconduct

Posted by Larry Doyle on February 4th, 2010 11:40 AM |

Are the wagons circling around Mary Schapiro and her former FINRA colleagues?

Regular readers of Sense on Cents are familiar with the issues and concerns I have raised repeatedly with Wall Street’s self-regulator, FINRA. I continue to believe the issues embedded within this self-regulatory organization lie near the heart of what I deem the Wall Street-Washington nexus.

Perhaps America will learn more about these issues soon. Why? Next week, FINRA’s Board of Directors will address alleged wrongdoings by Ms. Schapiro et al. What are the issues?   Read the rest »


A New Low at the SEC: Internet Porn-Surfing

Posted by Larry Doyle on February 4th, 2010 6:50 AM |

High five to our friends at The SIPA for further exposing, no pun intended, a story that employees (including high ranking officials) at the SEC seem to have had a predilection with internet porn sites. The Washington Times reported, SEC Workers Investigated for Porn-Surfing.

You can’t make this stuff up. Kudos again to The SIPA for putting the proper level of seriousness into its review of this story:

Who cares if employees watch Porn?
Millions of American Investors should!
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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