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Posts Tagged ‘jonathan Weil’

How Long Can Uncle Sam Rig the Game?

Posted by Larry Doyle on May 13th, 2010 5:32 PM |

Is the market rigged?

Actually, the question of whether our markets are rigged or not is becoming less and less a question and more widely accepted as fact. This reality is evidenced by the totally incredulous evidence that four major banks on Wall Street had perfect (not one negative trading day) first quarters.

Some may think this is good for our economy. I am not one of them. Why? (more…)

To Wall Street, Washington, and World: “Fool Me Once…

Posted by Larry Doyle on March 11th, 2010 2:08 PM |

…shame on you, fool me twice, shame on me!!!

There are a handful of financial journalists who pull no punches in telling the absolute truth and in providing real transparency. Bloomberg’s Jonathan Weil holds a special spot in the Sense on Cents Hall of Fame for his determination in calling people and institutions on the carpet. From Wall Street to Washington to around the global financial landscape, Weil leaves no stone unturned in promoting integrity. His commentary today is superb. Please share it with friends. Weil writes, Greece Lifts a Page From Citigroup’s Playbook:

Is it too much to ask for the world’s titans of government and finance to speak credibly when they open their mouths? (more…)

Might the Hunter Become the Hunted? Judge Jed Rakoff, Mary Schapiro, and Rule 14a-9

Posted by Larry Doyle on February 18th, 2010 8:51 AM |

Judge Jed Rakoff and SEC Head Mary Schapiro

Judge Jed Rakoff and SEC Head Mary Schapiro

SEC Chair Mary Schapiro is on the front page of almost every major financial periodical for her ongoing pursuit to fine Bank of America for impropriety in handling its merger with Merrill Lynch.

Recall that the SEC had initially fined Bank of America $33 million last fall for its improper disclosure of Merrill’s financial figures to BofA shareholders prior to the shareholder vote approving the merger of these two financial titans.

Enter Judge Jed Rakoff who threw out the $33 million fine, calling it a ‘contrivance.’

With the ball squarely back in the SEC’s court, Mary Schapiro has now fined Bank of America a tidy sum of $150 million, but still did not pinpoint any single individual at BofA as being culpable for the impropriety. (more…)

What’s Fueling America’s Rage?

Posted by Larry Doyle on November 20th, 2009 10:56 AM |

What is fueling America’s populist rage?

Is it the unemployment situation? Is it the volatility in the markets? The weakening greenback? Perhaps the generally perceived level of incompetence amongst our political and corporate leaders? Is it a media that does not hold our public officials and corporate leaders accountable?

While I could write extensively – and I have – on each of these questions, I am firmly convinced the ever increasing levels of populist rage go much deeper than any of these questions. How deep? To the very core of this great nation. What is at the core of any individual, institution, or nation?

Honesty and integrity.

Americans are a strong people. America is a proud land. That said, I believe we have allowed a semblance of moral decay to increasingly infiltrate our very core and we are now paying the price for it. How is this growing moral decay exemplified?

I am not suggesting that those who might hold differing opinions than mine on specific questions addressing ethical and moral topics as being the root of our current problems. I would like to think I am not so narrow-minded or judgmental. I do believe, however, that the rage sweeping our country on both sides of the political aisle stems from the reality that Americans are increasingly convinced that our political representatives, government officials, financial leaders, and their selected constituents have not been honest with America. (more…)

Touching All the Bases . . .

Posted by Larry Doyle on July 16th, 2009 5:31 PM |

I throw these items out given the magnitude of their potential impact for local economies and the market overall:

1. From Forbes The Obsolete New York Model, we learn that in

today’s New York City, where 1.2% of the taxpayers–40,000 households–pay 50% of the income taxes and half the households pay no income tax at all.

So what will the Obama health care plan, potentially funded by a surtax on higher wage earners along with a whole host of small businesses, mean for tax rates in New York City? We learn from a report published by The Tax Foundation, an independent Washington D.C. based organization founded in 1937, that the top tax rate in New York City would be 58.7%!! What do you think that does to the high end real estate market and job creation at small businesses?

2. Sticking with the Tax Foundation, we learn House Leadership’s Health Care Plan Pushes Top Tax Rates Over 50% In 39 States:

If Health Surtax Is 5.4 Percent, Taxpayers in 39 States Would Pay a Top Tax Rate Over 50%,” may be found online at

The hardest-hit states would be Oregon (57.5%), Hawaii (57.2%), New Jersey (57.1%), New York (56.9%), California (56.8%), Rhode Island (56.2%), Vermont (55.8%), Maryland (55.6%), Minnesota (54.4%) and Idaho (54.3%)

The effective marginal tax rate takes into consideration deductions and adjustments in order to present a truer measure of an individual’s rate.

Top tax rates in the remaining 11 states range from 47.3% to 50%.

Who else has an opinion about health care legislation and the proposed funding of Obama’s plan? None other than Douglas Elmendorf, head of the independent Congressional Budget Office (CBO). Elmendorf says in today’s Washington Post, CBO Chief Criticizes Democrats’ Health Reform Measures:

Instead of saving the federal government from fiscal catastrophe, the health reform measures being drafted by congressional Democrats would increase rather than reduce public spending on health care, potentially worsening an already bleak budget outlook, the director of the nonpartisan Congressional Budget Office said this morning.

Though President Obama and Democratic leaders have said repeatedly that reining in the skyrocketing growth in spending on government health programs such as Medicaid and Medicare is their top priority, the reform measures put forth so far would not fulfill their pledge to “bend the cost curve” downward, Elmendorf said. Instead, he said, “The curve is being raised.”

3. I have previously referenced how highly I consider Bloomberg reporter Jonathan Weil. In a discourse on CIT this afternoon, Weil pulled no punches in stating, “the government needs to stop lying about how well capitalized certain banks are.”


4. Sense on Cents is fully motivated to provide the clearest and most balanced assessment of the economy and markets. In that spirit, today’s rally was driven by a surprisingly bullish comment by none other than Dr. Doom himself, Nouriel Roubini. Bloomberg offers, U.S. to Recover, May Need More Stimulus. Roubini said:

“We might be at the bottom or close to the bottom,” Roubini said in a speech today at a Chilean investors’ conference in New York. “In many ways the worst is behind us in terms of economic and financial conditions,” he said, cautioning that “the recession might continue through the end of the year.”

“We should continue with fiscal stimulus and we might need a second one,” Roubini, 51, said today. There’s still a “meaningful amount of weakness” in labor markets, industrial production and housing, he said.

A second stimulus package of as much as $250 billion may be needed sometime early next year, particularly if unemployment goes “well above 10 percent by the end of the year,”

I read that assessment as “don’t break out the champagne but if you want a cold beer, go ahead.”

Keep those cards and letters coming . . .


Uncle Sam’s Regulatory Double Standard

Posted by Larry Doyle on May 7th, 2009 5:24 PM |

As I have referenced previously, Jonathan Weil of Bloomberg truly distinguishes himself as the finest commentator within the world of financial journalism. Weil takes on the financial regulatory authorities for their selective enforcements. Today he reports, Lehman Bosses Walk, While Small Fry Walk Plank. Why after 2 years haven’t senior executives from mortgage origination firms (Countrywide, Ameriquest, New Century, Long Beach), quasi-government agencies (Freddie and Fannie), commercial and investment banks, and credit rating agencies been more thoroughly investigated, if not arrested and prosecuted?

Is there any doubt these firms and executives effectively purchased their own protection? After writing “How Wall Street Bought Washington,” it became exceedingly clear that money from Wall Street bought protection for the business units and the individuals. It is not likely that Uncle Sam will target executives at firms holding government money. Additionally, if Uncle Sam targets execs at failed firms, those execs would be likely to finger others.

As Uncle Sam is now both investor and regulator in the markets, how do market participants compel him to be an honest broker on both fronts? As Weil writes, quoting former SEC head Chris Cox:

“From the standpoint of the SEC, the most obvious problem with breaking down the arm’s-length relationship between government, as the regulator, and business, as the regulated, is that it threatens to undermine our enforcement and regulatory regime,” Cox said in a Dec. 4 speech.

“When the government becomes both referee and player, the game changes rather dramatically for every other participant. Rules that might be rigorously applied to private-sector competitors will not necessarily be applied in the same way to the sovereign who makes the rules.”

Haven’t we already seen this play? Why is it that public confidence in the markets and those overseeing them is so low? When the security patrol in the casino also has LOTS of chips on the table, how do we know the dealer isn’t also in on the action? If so, is it any wonder why the unsavory activities of other “boys in the club” who have run out of chips aren’t being prosecuted?

I commend Weil for raising this topic. I can only hope other media outlets will pressure the regulators to level the playing field.


Did Big Ben Bernanke and Heavy Hank Paulson Break The Law in Buying Ken Lewis’ Silence?

Posted by Larry Doyle on April 28th, 2009 12:15 PM |

The intrigue involved in Bank of America’s takeover of Merrill Lynch goes well beyond standard Wall Street negotiations. Did Fed chair Ben Bernanke and then Treasury Secretary Hank Paulson break the law in the process of pressuring BofA CEO Ken Lewis to complete this bank merger? Bloomberg’s Jonathan Weil has easily distinguished himself amongst all journalists in aggressively addressing this topic. Weil pulls no punches in writing One Nation, Under Banks With Justice For No One.

Lewis, as CEO of Bank of America, possessed material non-public information about Merrill Lynch and was obligated by law to release that information to his shareholders. Lewis unequivocally maintains Bernanke and Paulson pressured him not to release that information which would have potentially derailed the merger. Why didn’t Lewis get Bernanke’s and Paulson’s position in writing? Did Lewis ask for it in writing?  Did Paulson and Bernanke knowingly avoid  a legal quagmire by not contractually committing in writing to increased government support for Lewis’ acquiescence?

Weil provides a clear expose of this situation. I commend him! He writes:

The spectacle of Ben Bernanke and Henry Paulson running roughshod over Kenneth Lewis and his minions at Bank of America Corp. raises a pivotal question for all Americans: Is the U.S. a nation of laws, or a nation of banks?

Let’s start by examining the facts disclosed last week in a letter by New York Attorney General Andrew Cuomo while taking pains to present the actions of each player in this drama in the fairest possible light. (more…)

“Beholden to Failed Banksters”

Posted by Larry Doyle on April 9th, 2009 3:56 PM |

Any investor or manager with a degree of experience knows that the “first loss is the best loss.” What do I mean by that? Once the market detects a loss or a weakened position, the price for that asset will remain capped unless and until the asset is sold or liquidated. This price action occurs in every sector of every market.

Welcome to the world of global finance 2009. As banks, insurance companies, hedge funds, and other financial entities deal with losses, we see a lack of aggressive posture being taken on dealing with these losses. Why? Once moral hazard is violated with a single entity, every other entity will look to violate it as well.

Immediate losses are forestalled in hopes that they will be covered or disguised. However, every loss ultimately must be recognized. By whom  and how is the question.

At this juncture, more of the losses in our financial system are being directed toward the taxpayers. How? Via the wide array of government programs. What is the cost? A likely underperforming economy due to a lack of credit, and higher taxes to offset lower revenues.  (more…)

Creative Accounting!!

Posted by Larry Doyle on March 27th, 2009 5:23 PM |

I will readily admit that my preferred source for market news is Bloomberg.  Having seen enough media outlets covering market activity, in my opinion, there really is no alternative to Bloomberg. Why? Literally every day I am learning and being introduced to new and useful information. The information emanates not only from those they interview, but often from their own in-house research and analysts.

To wit, I just caught a segment with Jonathan Weil, a Bloomberg reporter focused on corporate accounting. With 1st quarter earnings a few weeks away, Weil’s insights are the stuff that stops you in your tracks. 

In short, Weil highlights how companies effectively massage their earnings and income statements. Massage? Where’s Sarbanes-Oxley when you really need it to check the numbers?   (more…)

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