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Sedating the Quantitative Easing Monster

Posted by Larry Doyle on September 19th, 2013 9:04 AM |

At what point does a patient become addicted to medication so that a subsequent malady is potentially as bad if not worse than the original condition the prescribing doctor was trying to treat?

How disturbing is it to learn of individuals strung out on pain medication or more specifically methadone to treat a debilitating condition or drug habit?

Very disturbing.

In a very similar fashion, our resident medic, that being Fed chair Ben Bernanke, found himself boxed in by our patient, supposedly our economy but really our markets, that had begun to convulse and palpitate when word that its QE medication was going to be lessened.     Read the rest »


ARS Update: Investors Still Getting Screwed

Posted by Larry Doyle on September 18th, 2013 7:59 AM |

I am long overdue to address the ongoing — as in 5+ years — nightmare that defines the world of auction-rate securities, aka Wall Street’s greatest scam.

“You mean this is still going on”  is a common refrain I have heard from a variety of media representatives, lawyers, investors, and even regulators.

Yes, indeed, the ARS nightmare continues with seemingly little evidence of meaningful support provided to those ARS investors still left standing in the cold wondering whatever happened to the concept of investor protection embedded in the securities reform legislation passed back in the 1930s.

We know that FINRA liquidated its own ARS holdings — all $650 million of them — back in 2007. If not for that fortuitous (??) stroke of luck (??), perhaps the regulator would also be waiting in line wondering if and when it might get its money back.

To check in on how the supposedly venerable firm of Goldman Sachs is partaking in the ongoing screwing of ARS clients, I thank a regular visitor to these parts who shared a commentary. Read the rest »


Simon Johnson’s Sense on Cents Classic

Posted by Larry Doyle on September 17th, 2013 9:15 AM |

On a daily basis we now get fed less than comprehensive if not fully distorted views of the last 5 years by an array of politicians, industry sponsored economists, and assorted other puppets.

While the airwaves and other outlets are filled with much of this noise, let’s take a step back so we can get the wide-angled view as to what has really transpired within our nation and the global economy. To do so, lets check in with Sense on Cents Hall of Famer Simon Johnson who provided a prescient view as to what was — and is — really going across a wide swath of our economic landscape.

In a Sense on Cents “past is prologue” classic, Johnson wrote back in 2009 in The Atlantic:  Read the rest »


Won’t Have Larry Summers to Kick Around Anymore

Posted by Larry Doyle on September 16th, 2013 10:51 AM |

I have no doubt that Larry Summers’ choice to withdraw from his well known desire to be the chairman of the Federal Reserve only came at the behest of the White House.

I firmly believe that President Obama and the most senior execs on Wall Street wanted their pal Larry to be the next Fed chair.

As it became increasingly obvious that a Summers nomination would have required an expenditure of significant political capital, the administration likely told Larry to do the honorable thing and step aside gracefully.

Most observers know that Summers is not typically defined as graceful, but rather more akin to a lighting rod. As seen in this brief Bloomberg clip: Read the rest »


Morning Joe : How Wall Street Won

Posted by Larry Doyle on September 13th, 2013 9:27 AM |

Lehman Brothers failed on September 15, 2008.

We are now two days away from the 5 year anniversary of that fateful day and the unfolding of a string of events that continue to ripple across our global economy and markets.

As with the anniversaries of most cataclysmic events, we can now expect an ongoing stream of dialogue as to what led to the crisis and how things have played out since then.

The folks at Morning Joe had a brief 7-minute discussion recently with Time magazine editor Radhika Jones on this topic and these questions. They definitely hit upon some of the key issues but they do not use the one key word to define what really happened both pre and post crisis. What is that word? Let’s take a listen first to what they have to say: Read the rest »


5 Years Later: Banks Still Too Leveraged

Posted by Larry Doyle on September 12th, 2013 9:09 AM |

Do you think there is a reason why bank balance sheets are so convoluted and opaque? Of course there is.

The lack of meaningful transparency allows the banks to continue to employ excessive degrees of leverage across a widely disparate array of businesses and with a paucity of competition all in the hope of generating outsized returns. But who do you think bears the ultimate risk?

They pursue these paths with the support of the Federal Reserve’s zero interest rate policy and a regulatory system that belies meaningful oversight despite those who might want us to believe that Dodd-Frank brought reform to the system.

Former FDIC chair Sheila Bair does not leave much to interpretation on these topics.  Read the rest »


Congressional Insider Trading: Bait and Switch

Posted by Larry Doyle on September 11th, 2013 9:57 AM |

Are people aware that Congress had meaningfully changed the legislation outlawing insider trading atop Capitol Hill? This bait and switch occurred a few months back but received very little fanfare at the time.

It deserves not only attention but real exposure. With no transparency there will never be a meaningful return of trust but that virtue is in short supply in the crony style of capitalism played in our nation’s capital. But I guess we are told to very simply “move along, nothing to see here.”  I thank the regular reader who shared the following:  Read the rest »


5 years After Lehman: Has Anything Really Changed?

Posted by Larry Doyle on September 10th, 2013 7:07 AM |

The more things change, the more they stay the same.

For those in and around Wall Street and Washington who pretend that there has been meaningful change in the issues that brought about our crisis in 2008, I have endless archives to highlight all too much remains the same.

Rather than diving into the archives, though, let’s navigate a Bloomberg commentary that qualifies as a Sense on Cents instant classic (and would serve as a fabulous promo for my upcoming book).

The simple fact is both Wall Street and Washington remain very much the same as details within Banks Seen at Risk Five Years After Lehman Collapse attest. What is Wall street currently?  Read the rest »


WSJ Interview with Chris Dodd

Posted by Larry Doyle on September 9th, 2013 9:37 AM |

As the 5 year anniversary of the demise of Lehman Brothers approaches, I would expect to see a steady stream of reviews of that critical period and interviews with some of the players involved.

Do not expect any mea culpas from those who brought our nation to its knees but let’s take a closer look at what former US Senator Chris Dodd has to say about those fateful days and his attempt to clean up a mess that he was party to creating in the first place.

The WSJ recently interviewed him regarding the financial regulatory reform legislation that has his name attached: Read the rest »


Dodd-Frank Derivative Reform: Dead on Arrival

Posted by Larry Doyle on September 5th, 2013 8:59 AM |

While many in Washington and elsewhere will look to collect political points for bringing reform to Wall Street, those watching closely knew all too well that the blueprints for this reform were always subject to massive change.

So has Dodd-Frank brought real reform to Wall Street? If you believe so, I would invite you to become a charter member of The Gullible Club.

Let’s dispense with the formalities. Wall Street ultimately answers to nobody but itself. As such, we can unload another truckload of dirt over the casket holding Dodd-Frank.

While many observers of the financial and political scenes are not inclined to draw attention to this service, fortunately those at Bloomberg view this funereal undertaking more seriously. I thank them as they recently pulled back the cloak on Dodd-Frank to reveal a Wall Street dagger protruding from its midst. 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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