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HomeWall Street’s Oligopoly Flexes Its Muscle
Posted by Larry Doyle on March 15th, 2010 12:51 PM |
Pricing power is everything.
What businessman wouldn’t like greater control and influence over the pricing of his goods and services? How are prices determined? In a capitalist system, prices are a function of the competitive forces of supply and demand. What happens when competition dwindles? Pricing power for the suppliers increases. How does competition dwindle? When barriers to entry are so high, or competitors go out of business. This economic reality is also known as an oligopoly and it defines the current state of our financial industry known as Wall Street.
Is Wall Street taking advantage of the lessened competition and flexing its muscle to drive revenue? Is the Pope Catholic? (more…)
Dick Fuld Unaware of Lehman’s ‘Cooking the Books’? STOP IT!!
Posted by Larry Doyle on March 13th, 2010 2:34 PM |
Given the global interest in this story, I am bumping it up from the original posting on 3/12/2010. LD
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Former Lehman Bros. CEO, Dick Fuld
Reports that Lehman was effectively ‘cooking its books’ prior to its ultimate demise are not a surprise.
Reports that Dick Fuld, then CEO of Lehman, was not aware of the nature of this cooking are both ridiculous and pathetic.
The lifeblood of every financial institution on Wall Street is access to financing for its operations. That financing very often comes in the form of repurchase agreements (repo financing), in which the institution borrows funds while pledging assets. These short term loans, often overnight loans, are unwound at a preset date and preset prices. The rates borrowers have to pay for funds borrowed depend on the credit quality of the borrower itself and the quality of the assets pledged. (more…)
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. (more…)
POGO Podcast Questions FINRA’s Transparency and Integrity
Posted by Larry Doyle on March 6th, 2010 12:24 PM |
Regular readers of Sense on Cents know all too well my questions and concerns about the lack of transparency at the Wall Street self-regulatory organization FINRA (Financial Industry Regulatory Authority).
I am a big fan of promoting transparency in order to pursue integrity. Who else is a big fan of the same goals? The Project on Government Oversight (POGO) :
. . . an independent nonprofit that investigates and exposes corruption and other misconduct in order to achieve a more effective, accountable, open, and ethical federal government. (more…)
Did Hawaii Purchase ARS from FINRA through Citi?
Posted by Larry Doyle on March 4th, 2010 7:29 AM |
The auction-rate securities market did not instantaneously freeze in early 2008. The fact is, the ARS market started to fail in mid-2007 on the heels of a variety of market segments repricing given the liquidity issues on Wall Street. Recall that mortgage hedge funds at Bear Stearns cratered in spring 2007. At that point, Wall Street was becoming much more risk averse while shepherding the use of its own capital and balance sheets. During this point in time, the ARS market started to fail and ultimately totally froze in early 2008.
Evidence is rampant that Wall Street worked feverishly from mid-2007 until early 2008 to offload auction-rate securities anywhere and everywhere without informing investors of the failing nature of the market. (more…)
Judge Rakoff Dismisses Suit Against Mary Schapiro and FINRA Under Absolute Immunity
Posted by Larry Doyle on March 1st, 2010 5:49 PM |
America should be reviled when those charged with upholding the law overseeing our markets are not held to that standard themselves.
Today is a very dark day for those in our country who cherish the virtues of truth, transparency, and integrity.
Why am I despondent? This afternoon, Judge Jed Rakoff issued a ruling dismissing the lawsuit brought on behalf of Standard Investment Chartered against Mary Schapiro and other FINRA executives. What is the basis for Judge Rakoff’s dismissal? He allowed the defense the cover of absolute immunity in the merger of the NASD with NYSE Regulation to form FINRA. (more…)
Markopolos on SEC: “A Bunch of Idiots”
Posted by Larry Doyle on February 28th, 2010 12:23 PM |
Harry Markopolos has become a household name in the realm of financial regulatory oversight. Harry earned his stripes for his dogged pursuit of the Madoff scam, especially in light of the lack of support from the SEC.
Harry characterized the SEC as incompetent during his initial Congressional testimony addressing the Madoff scam early last year. During that testimony, Harry characterized FINRA as “in bed with the industry.”
Who in America did not view Harry as a hero for his determination and drive in exposing the Madoff scam?
In light of Harry’s work over the years, I was somewhat befuddled by Harry’s excessively complimentary remarks directed toward Mary Schapiro last fall during Congressional testimony highlighting SEC Inspector General’s David Kotz’ review of the SEC’s handling of the Madoff affair. Harry seemed to lose his disdain for Mary and the SEC.
Well, Harry has regained his edge and his contempt for the SEC. (more…)
Is FINRA’s Future in Doubt?
Posted by Larry Doyle on February 23rd, 2010 2:04 PM |
Are the days of Wall Street’s self-regulatory organization known as FINRA numbered?
In the opinion of the very credible Project on Government Oversight, they should be. Why? Significant failures, massive conflicts of interest, and more. POGO’s comprehensive and scathing letter to four separate House and Senate committees touches upon every failing within FINRA, with the exception of the integrity of the proxy statement used in the formation of the organization itself. Strong allegations in a current lawsuit against FINRA make the case that Mary Schapiro lied verbally during roadshows and in the proxy statement. (For details on this lawsuit read here.)
Despite not addressing the issues embedded in that lawsuit, POGO touches all the other bases and covers all the other issues surrounding this organization. (more…)
WSJ Hits Mary Schapiro Hard on ‘Say on Pay’ but That’s Only Tip of the Iceberg
Posted by Larry Doyle on February 20th, 2010 11:58 AM |
The target on SEC Chair Mary Schapiro’s back is getting larger and gaining more focus. How so?
The lead editorial in this weekend’s edition of The Wall Street Journal goes after Schapiro hard in writing, Mary Schapiro’s Say on Pay. While the editorial leads with the ongoing battle Schapiro and the SEC are having with Bank of America’s lack of disclosure during its merger with Merrill Lynch, the Journal quickly turns the tables on Ms. Schapiro and addresses the lack of disclosure at Ms. Schapiro’s former haunt, FINRA.
Come to papa.
Regular readers of Sense on Cents are well aware of how consistently and steadily I have been banging this FINRA drum. It is long past due that America is truly introduced to Wall Street’s self-regulatory organization, the Financial Industry Regulatory Authority (FINRA). (more…)
