RSS Feed
Twitter
Facebook
Email
HomeConsumption Takes Another Leg Down
Posted by Larry Doyle on August 23rd, 2010 7:56 AM |
Do you increasingly feel that you are not receiving the full story in terms of our overall economy? Do you feel as if the ‘political class’ in Washington is speaking a different language than the ‘working class’ in the rest of the country? Do you scratch your head as to why economic releases are often immediately panned and quickly thereafter revised? (Case in point, the initial release of 2nd quarter GDP on July 30th was quickly thereafter projected to be halved.) For all of the above reasons, more and more Americans are relying on independent economic research and analysis. Two of my favorites in this camp (aside from Sense on Cents, of course!!) are John Williams of Shadow Government Statistics and Rick Davis of Consumer Metrics Institute.
I recently highlighted Williams’ work in writing, What Is the Real Rate of Unemployment in the United States? In that commentary, I referenced Williams as he had stated:
That began a lengthy process of exploring the history and nature of economic reporting and in interviewing key people involved in the process from the early days of government reporting through the present.
For a number of years I conducted surveys among business economists as to the quality of government statistics (the vast majority thought it was pretty bad), and my results led to front page stories in the New York Times and Investors Business Daily, considerable coverage in the broadcast media and a joint meeting with representatives of all the government’s statistical agencies. Despite minor changes to the system, government reporting has deteriorated sharply in the last decade or so. (LD’s emphasis) (more…)
Who Are the FINRA Board of Governors?
Posted by Larry Doyle on August 22nd, 2010 10:23 AM |
While the general financial media would seem not to understand nor care that Wall Street to a large extent is a self-regulated industry, many within the industry and around the country very much care. The Financial Industry Regulatory Authority (FINRA) is the financial industry’s self-regulatory organization.
At FINRA’s 2010 Annual Meeting held a week ago, FINRA’s member firms overwhelmingly voted for seven aggressive non-binding proxy proposals. These proposals were by and large targeted at bringing greater transparency and disclosure to FINRA’s operations. Will FINRA’s board of governors acquiesce and fully address these proposals? (more…)
Is FINRA’s Board Tone Deaf?
Posted by Larry Doyle on August 20th, 2010 3:15 PM |
When might a voting process with overwhelming returns be negated by the wishes and desires of the powers that be? Am I speaking of those who may occupy bully pulpits in third world nations? No, that guess would not be close.
Am I referring to political leaders who are protected by military and business minions? Nope, still quite cold.
How about a board that is more affiliated with an organization’s executives than with its members? We are getting warmer.
What about financial regulators and a board who have the reputation of being much more closely aligned with major players within the financial industry than their rank and file members and American investors at large? Bingo!!
Let’s get more specific. A week ago, FINRA’s member firms voted overwhelmingly in favor of seven non-binding proxy proposals put forth by Amerivet Securities. In light of the vote and the overwhelming results, one would have thought that FINRA’s board would have absolutely no choice but to fully address these proposals. To do otherwise, one would think that the FINRA board might run the risk of further alienating its membership while sending a message to the American public at large that transparency and disclosures are virtues this financial regulator speaks of but does not truly practice. (more…)
“Markets Don’t Go Up, They’re Put Up”
Posted by Larry Doyle on August 20th, 2010 6:57 AM |
I have to admit, while I personally view myself as an optimist by nature, I come from an immediate and extended family which could redefine what it means to be cynical. Often, I will initially chuckle when hearing my siblings (6 brothers, 1 sister) and uncles characterize an individual or situation in less than glowing terms. The busting on each other typically continues until somebody goes over the line. That happens fairly regularly.
Invariably, a number of my brothers, uncles, and I will not be able to restrain ourselves from laughing, while the individual targeted for the good-natured ridicule exits the conversation often cursing under his breath. Such is life in a close-knit, Boston Irish Catholic family.
That strong, competitive, acerbic cynicism does not end at Mom’s kitchen door but carries over into the workplace. My immediate and extended family largely pursued careers in the legal and investment fields. Both career paths have allowed our cynical wit to flourish. Why do I raise this topic? (more…)
New Jersey’s State Pension? Fuhgeddaboutit!!
Posted by Larry Doyle on August 19th, 2010 7:35 AM |
In a state that has a reputation for putting the ‘organized’ in ‘organized activities,’ is anybody surprised that New Jersey has been charged with misrepresenting the health of its state pensions? (The state has already settled). How do you think politicians get elected? Line the pockets of the unions with lavish pensions and perks, then stick it to future generations. This scam has been played for years. What’s new now?
The Wall Street Journal provides further details on this story in reporting, SEC Sues New Jersey as States’ Finances Stir Fears:
The Securities and Exchange Commission, in its first securities-fraud case against a state, accused New Jersey of misleading investors about the health of its two largest state pensions while selling billions of dollars in bonds.
State authorities settled the case without admitting or denying wrongdoing.
While it singled out New Jersey, the SEC is conducting several investigations into what other states disclosed about their weakened finances. (more…)
Judge Huvelle: “Why Would I Find This Fair and Reasonable?”
Posted by Larry Doyle on August 18th, 2010 2:09 PM |
Wall Street has a funny way of meting out justice. All too often, investors are left with little more than ‘caveat emptor’ when it comes to engaging large Wall Street institutions. Beyond that, the SEC and FINRA are often critiqued for being more closely aligned with the industry than with investors. I was reminded of this fact when reading last week that the SEC settled with Citigroup for a token $75 million regarding Citi’s disclosure, or lack thereof, of its sub-prime holdings in the midst of our economic crisis.
My ‘sense on cents’ view of the world made me think that Citi got off awfully cheap for having misrepresented its financial positions. If $75 million is all it costs for misrepresentation of financial documents, then America should ready itself for a whole lot of misrepresentation. Thankfully, a judge threw a quick yellow flag on the field while indicating that this play needed further review. (more…)
Raymond James ARS Customer Requests/Offers Help
Posted by Larry Doyle on August 18th, 2010 7:23 AM |
Sense on Cents has been happy to provide a forum for auction-rate securities holders in general. On a more specific note, Sense on Cents has generated significant ARS interest from individuals remaining engaged with Oppenheimer and E*Trade.
We can now add Raymond James to the list of entities entangled in the auction-rate securities cesspool. While I am not in a position to pass judgment on the merits of every specific ARS client’s situation, the simple fact is so many of these situations are strikingly similar.
I am heartened that Sense on Cents has not only been able to provide moral support to many ARS holders but has also been able to pass along meaningful information in the process. In this spirit, I am compelled to highlight two comments left here Monday by an individual who remains frozen in ARS sold by Raymond James. While reading these comments, put yourself in this writer’s position. The fact is this writer and virtually every ARS investors are connected. I hope my highlighting his comments can help bring this individual and many others both moral and real support. (more…)
A Proposed Solution to the Foreclosure Crisis
Posted by Larry Doyle on August 17th, 2010 12:12 PM |
With the Conference on The Future of Housing Finance being held in Washington today, do we really expect the government to propose anything that may help support or fix our system of housing finance? I am not optimistic and I am an optimist by nature. I am a big believer in unleashing the power and strength of entrepreneurial minds to address our problems. Why haven’t these minds developed solutions? Do you think that these minds are stifled by the overwhelming presence of Uncle Sam? I do. Back to housing and entrepreneurial spirits.
I love when Sense on Cents can provide fertile ground for the free and open exchange of ideas, opinions, thoughts, and analysis on critically important issues of the day. I am deeply grateful when people not only comment here at Sense on Cents but I encourage people to provide written commentary. I can not promise that I will run every commentary that is submitted but I will seriously review and consider running those that I believe are deserving of greater exposure. I appreciate your allowing me to make those judgments. Plus ….it is my blog.
I have always maintained that jobs and housing are the two great linchpins upon which our economy rests. The government has thrown hundreds of billions of dollars at our housing crisis with no meaningful success….all reports aside. What can be done to solve the foreclosure crisis weighing on our housing market, our economy, and ultimately our nation? (more…)
Fannie, Freddie Summit Preview
Posted by Larry Doyle on August 16th, 2010 4:03 PM |
In June 2009, I highlighted the expectation of massive losses within Fannie Mae and Freddie Mac in writing Uncle Sam’s Dirty Little Secret. Fourteen months and hundreds of billions of dollars in losses later, America awaits to see how our ‘wizards in Washington’ will look to deal with these housing ‘wards of the state.’ Tomorrow, the Obama administration hosts the “Conference on the Future of Housing Finance.”
In anticipation of this conference, this past April the Obama administration had asked for input as to how our housing finance system might work. I wrote then (and would like to resubmit now), Sense on Cents Responds to Obama Administration Request for Input:
President Obama wants input on the reform of the housing finance system. Given my career, I consider myself eminently qualified to give it to him. Despite this request, though, I still think he should focus on job creation (which he highlighted during his State of the Union address).
I welcome giving President Obama, Treasury Secretary Geithner, and the rest of the the White House economic team a very healthy dose of Sense on Cents. (My response is a little lengthy, but it is not everyday the President gives us this opportunity. Out of respect, I owe him my best effort.) I will let you know if they respond with anything more than a form letter, or if they do not respond at all. From the U.S. Treasury today:
Obama Administration Seeks Public Input on
Reform of the Housing Finance System (more…)
What is The Real Rate of Unemployment in the United States?
Posted by Larry Doyle on August 13th, 2010 8:06 AM |
Just what is the true rate of unemployment in our country? Our headline U-3 rate is currently 9.5%. Our U-6 rate, more broadly defined, is 16.5%.
Many people are aware of the differences between U-3 and U-6; however, renowned economist John Williams takes our analysis to an entirely new level. Williams is far ahead of the curve in his work.
William is likely not a regular on the Washington cocktail circuit. Why’s that? He goes far deeper in his work and exposes inconsistencies, if not worse, in government statistics. Let’s learn more about Williams and his work at Shadow Government Statistics:>>>> (more…)
