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Posts Tagged ‘Bloomberg’

Fed’s Bullard: Enlightening on Housing and Economy

Posted by Larry Doyle on June 22nd, 2012 9:52 AM |

James Bullard I love people who speak the truth.

Regrettably, speaking the truth today is an increasingly rare commodity in our nation and on the global economic landscape. Given that reality, unbiased and bold truth telling hits me like a rush of adrenaline on a cool, crisp morning.

I got just such a rush listening to Bloomberg today as Tom Keene interviewed St. Louis Fed President Jim Bullard.

For those who care to learn and understand what is going on in our global economy, this interview was truly enlightening. (more…)

Merrill Lynch: Time to Take Some ‘Risk Off’

Posted by Larry Doyle on April 13th, 2012 2:40 PM |

With so many sectors of the market displaying significant correlation, investors and traders have come to define market movements, in general, as ‘risk on’ and ‘risk off’.

Despite the fact that central banks have provided endless amounts of fuel to prop markets, there are still points in time when indicators flash warning signals that markets are overextended. Is now one of those times?

According to Bank of America Merrill Lynch it is.  (more…)

Will European Bank Stress Tests Be “Garbage In, Garbage Out?”

Posted by Larry Doyle on July 23rd, 2010 6:52 AM |

All eyes will turn toward Europe this afternoon for the much anticipated release of the Euro-style Bank Stress Tests. Those who truly embrace real ‘sense on cents’ know that the process and the data are far more important than the actual results. Why is that? If these tests are charades or nothing more than ‘garbage in,’ then the results will most assuredly be ‘garbage out.’

On this note, let’s review a few comments from a Bloomberg preview of these tests. Bloomberg reports, Success for Stress Tests Hinges on Data, Not Failures:

1. The success of the European Union’s bank stress tests hinges on how much detail regulators provide about the basis for their conclusions, not on the number of lenders that fail, investors said. (more…)

Steady Decline Through 2060?

Posted by Larry Doyle on June 28th, 2010 1:12 PM |

What type of legacy are we leaving our kids? Will we leave them so burdened with overwhelming debts and deficits so as to strangle and choke off real opportunities? While Uncle Sam is able to play charades in an ever increasing and dramatic fashion, Sam’s smaller brethren at the state and local levels do not have those capabilities.

On that note, let’s look westward. I wrote in May 2009, “As California’s Economy Goes, So Goes the Country.” Along the same line, today we read from BloombergStates of Crisis for 46 Governments Facing Greek-Style Deficits:

Californians don’t see much evidence that the worst economic contraction since the Great Depression is coming to an end. (more…)

What Would John Maynard Keynes Do Now?

Posted by Larry Doyle on June 8th, 2010 7:41 AM |

John Maynard Keynes

What now?

As G20 nations around the world retreat from policies of continued coordinated fiscal stimulus, the question begs, what does the future hold for a world awash in crushing levels of overwhelming debt? Is the United States the only nation willing to stick to the script of classic Keynesian economics?

If only we could go back in time and ask John Maynard Keynes, the economic giant amongst economic giants, what he would propose now? Would Keynes stick to his classic Keynesian economics script at this juncture? Could Keynes ever have envisioned a world awash in so much debt? (more…)

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. (more…)

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. (more…)

White House Sees Elevated Unemployment for ‘Extended Period’

Posted by Larry Doyle on March 16th, 2010 11:43 AM |

Is the White House reading Sense on Cents?

While I ask that question in a self-effacing fashion, I will allow others to pass muster as to whether my commentary deserves attention in Washington. Why do I ask that question now though? I wrote this morning, “What Happened to Focus on Jobs?”:

The ‘talking points’ utilized by those in Washington project that our economy and markets are experiencing cyclical unemployment. I firmly believe they are wrong. Our economy and markets are experiencing structural unemployment.

Now it appears as if the White House ‘talking points’ have changed. (more…)

Will TARP Screw ARPS Even Tighter?

Posted by Larry Doyle on March 25th, 2009 1:37 PM |

screw1I have written extensively how Wall Street perpetrated a multi-billion dollar scam in the name of Auction Rate Preferred Securities (ARPS). For our newer readers, ARPS are securities funded by longer maturity underlying loans or preferred shares but marketed as short term cash or money market surrogates. How would that work? Wall Street ran very regular (weekly, monthly) auctions to provide liquidity for ARPS holders. The scam worked well until the overall market hit the skids and the Wall Street dealers backed away from providing liquidity to these supposed short term cash/money market instruments.

In the process of reviewing the underlying loans backing these deals, investors became aware of the long term nature of that collateral and thus their investment. While there is overwhelming evidence supporting the gross mismarketing of these securities, the SEC and FINRA have dragged their feet in rectifying this situation. Why? Great question.

I have highlighted that FINRA actually owned $647 million of ARPS as of year end 2006. That news is shocking to whomever I inform. Did FINRA sell their bonds? If so, to whom? When? What price? Did they front run an imploding market?

Could taxpayers via the TARP (Troubled Asset Recovery Program) actually get stuck making investors whole for a scam perpetrated by Wall Street? This fraud gets more bizarre at every turn. Welcome to the world of finance 2009.

I thank PT for sharing with me a story that broke yesterday: (more…)

We Need a Bigger Boat

Posted by Larry Doyle on March 23rd, 2009 6:05 AM |

"We need a BIGGER boat!"

"We need a BIGGER boat!"

The movie Jaws struck fear into the souls of beachgoers in the mid-70s. If our current economy were only a scary movie. A classic scene in Jaws occurred when the salty mariner Quint eyed the shark and informed his sidekicks, “we need a bigger boat.”

 In similar fashion, the size of the losses embedded in our banking, insurance, automotive, and states and municipalities will similarly require “a bigger boat!!”

Capital needs in the banking industry are projected from at least $500 billion to $1.5 trillion. Bloomberg reports former Fed chair Greenspan Says Banks Need $750 Billion More Capital. Nouriel Roubini puts the needs at upwards of $1.5 trillion. (more…)

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