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Matt Taibbi Exposes Wall Street’s Regulatory Capture Strongly Recommended

Posted by Larry Doyle on February 17th, 2011 6:30 AM |

Regular readers may be accustomed to my designating the relationship between our financial industry and the political crowd as the “Wall Street-Washington incest.” The technical term for this relationship is regulatory capture, as defined by our investing primer:

…the process by which regulatory agencies eventually come to be dominated by the very industries they were charged with regulating. Regulatory capture happens when a regulatory agency, formed to act in the public’s interest, eventually acts in ways that benefit the industry it is supposed to be regulating, rather than the public.

Bingo!! That’s the incestuous relationship we’re talking about.

Is the game really on the up and up? How does regulatory capture work? Who are the financial cops really protecting?

Thank you to the number of readers who pointed out to me an amazing expose of regulatory capture written by Matt Taibbi in Rolling Stone. Taibbi provides extensive detail in writing, Why Isn’t Wall Street in Jail? This article is a must read. Read the rest »


Bernie Madoff Targets Banks and Hedge Funds: “They Had to Know”

Posted by Larry Doyle on February 16th, 2011 7:04 AM |

Bernie Madoff Bernie Madoff BiographyBernie Madoff deserves zero sympathy and less attention. On the other hand, those seriously impacted by his crimes deserve not only sympathy but also recompense. Irving Picard, the trustee pursuing that recompense on behalf of Madoff investors, is making some high profile claims and has generated substantial results. That said, selected Madoff investors have informed me that they give Picard very mixed reviews.

While Bernie rots away, he did speak out recently and slightly opened the window into his scheme. In the process, Madoff made an assertion that I think anybody with half a brain would have already assumed. The New York Times reports, From Prison, Madoff Says Banks ‘Had to Know’ of Fraud: Read the rest »


Connecting the Dots: Our Dollar Continues Multi-Year Decline as Both Political Parties Are “On the Take”

Posted by Larry Doyle on February 15th, 2011 8:55 AM |

In the course of my regular early morning reading (thank you to the regular readers who feed me these resources), I came across some fabulous work.

1. The Dallas Federal Reserve puts forth an enlightening piece entitled Global Economic Conditions. The 43 page treatise covers a wealth of information but my attention was grabbed primarily by the graph highlighting the continued decline in the core rate of inflation on page 11, and the ~20% decline in the value of our U.S. dollar over the last decade versus other major currencies on page 38.

While skyrocketing food and energy costs globally will likely continue to foment civil unrest in selected nations, Fed chair Bernanke is assuredly singularly focused on that continued decline in the core rate of inflation. How will he respond? Many individuals whom I respect believe Bernanke will continue to flood our economy with more and more dollars via quantitative easing. What does that portend for the value of our greenback? It ain’t good. What do others think of our Federal Reserve and fiscal fiascos? Let’s navigate further. Read the rest »


February 14, 2008-2011: Auction Rate Securities Nightmare Continues

Posted by Larry Doyle on February 14th, 2011 7:36 AM |

“Take it, Phil. It’s free money.”

With that statement the saga of noted author Phil Trupp into the world of auction-rate securities commenced. Phil’s nightmare experience with auction-rate securities mimicked that of so many other tens of thousands. Three years to the day after the ARS market totally collapsed, that nightmare in which investors remain unable to access their cash from their supposed cash-alternative investment continues.

Selected financial regulators, such as FINRA, have the balls to promote the success they have had in recouping ARS investors funds. Let the record show, though, that three years to the day when the ARS market froze, approximately 40% of investor funds remain frozen. Their nightmare continues. Who is standing up and fighting for these ARS investors? Read the rest »


Lieutenant Colonel Elton Johnson on Way to Afghanistan Calls Out Finra…AGAIN!!

Posted by Larry Doyle on February 11th, 2011 7:07 AM |

I first wrote about Wall Street’s self-regulatory organization, FINRA (the Financial Industry Regulatory Authority) in January 2009. At that point and ever since I have believed strongly that for a revitalization of the health and confidence of our capital markets, our economy, and ultimately our nation itself that FINRA needed to become a MUCH more transparent organization. Regular readers of Sense on Cents know how passionately I feel.

Regrettably, though, outside of those regularly involved in the financial industry, I believe few people in our nation even know who FINRA is or what they do regulating Wall Street. I strongly believe that reality needs to change. Who would seem to share my belief? Amerivet Securities’ Lieutenant Colonel Elton Johnson, a member of the United States Army Reserve. Read the rest »


“There’s No Sense of Urgency” in Washington

Posted by Larry Doyle on February 10th, 2011 7:35 AM |

For those critical of Ben Bernanke and his massive bubble inducing, asset inflating quantitative easing program, Ben and his Federal Reserve friends have something to say to you. What wisdom do these banking behemoths have to share? Are you sitting down? In so many words, Bernanke and company offered that ‘if you think we’re bad, you should really focus on the clowns who have run up the out of control federal deficit.’

Wow!

Do two wrongs make a right? Does digging one hole get us out of another? Does a series of left hand turns ultimately bring us right back to where we began? Does anybody in Washington have the character to address our real structural problems? Does pointing fingers really get us anywhere? Why are we faced with these questions and problems? A lack of real leadership. Read the rest »


ARS ‘Penalty Does Not Fit the Crime’ or Why I Am Becoming a Libertarian

Posted by Larry Doyle on February 9th, 2011 7:38 AM |

Why is it that so many people in our nation do not trust our government, our media, and our banking system?

In my opinion, America continues to look and search for people and programs that truly represent their interests. In the course of a conversation yesterday with a former colleague, he spoke cogently as to why he is moving toward being a libertarian and why he believes so many others are as well. I found myself agreeing with him on so many fronts.   Read the rest »


Obama’s Conundrum

Posted by Larry Doyle on February 7th, 2011 9:59 PM |

Cut the deficit? Promote jobs? Stimulate the economy? Get re-elected?

What’s a President to do?

In the short term, is there any doubt that Barack is fully supportive of Ben Bernanke’s ongoing backdoor bailouts and bubbling up of the market via his quantitative easing programs? Ben made no bones about his utilizing asset inflation as a means of stimulating the economy. Does that mean that hedge funds putting on carry trades in foreign markets are going to stimulate our economy here at home? Really? How does that work? Read the rest »


Questions Left Unanswered

Posted by Larry Doyle on February 7th, 2011 7:13 AM |

Some random thoughts and questions in the midst of trying to determine what is really going on in the markets, the economy, and the world:

1. Just how healthy are our major money center banks? How many toxic mortgage related assets remain on their books? Where are those assets marked? With the housing market continuing to erode, and it is, how can those asset valuations not be eroding as well?

2. Will the American public ever truly learn what happened inside Bernard Madoff’s operations? Read the rest »


Did JP Morgan Aid and Abet Bernie Madoff? Time for Jamie Dimon ‘To Put Up or Shut Up’

Posted by Larry Doyle on February 4th, 2011 8:33 AM |

Just the facts.

A week ago at The World Economic Forum in Davos, Switzerland, Jamie Dimon, chief of JP Morgan, railed on the widespread vilification of bankers by the general public. The Wall Street Journal highlighted Dimon’s comment in writing, A Banker’s Plaintive Wail:

“A plaintive cry from one of the world’s top bankers on behalf of his industry pierced through an otherwise tame Thursday morning panel discussion here in Davos:

“I don’t lump all media together,” said Jamie Dimon, chief executive of J.P. Morgan Chase & Co. “There’s good and there’s bad. There’s irresponsible and ignorant and there’s really smart media. Well, not all bankers are the same. And I just think this constant refrain ‘bankers, bankers, bankers,’  — it’s just a really unproductive and unfair way of treating people. And I just think people should just stop doing that.”

Mr. Dimon argued that J.P. Morgan was one of the good banks..

On one hand, I agree with him. I have worked with many fabulous bankers throughout my career and count many of them as close personal friends. None of them actually run a major banking organization.

If  Mr. Dimon wants to be distinguished as ‘one of the good guys’ and JP Morgan as ‘one of the good banks,’ he now has his opportunity to ‘put up or shut up.’ How so? Let’s reenter the world of Bernie Madoff. 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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