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Posts Tagged ‘LD’

What Happens When Investors Lack Trust?

Posted by Larry Doyle on August 6th, 2010 1:05 PM |

Think the structure of the equity markets is broken? With the preponderance of equity volume now dominated by high frequency trading and true retail investors fleeing in droves, what do people think the chances are that we could experience another Flash Crash as we saw on May 6th?

Last evening, The Wall Street Journal ran an online poll on this topic in Legacy of the ‘Flash Crash.’ I have to admit, I was surprised by the results. Did you get concerned witnessing the 1000 point ‘whoosh’ in a very short time period on May 6th? An overwheming number of pollsters believe it can happen again.

With our computer-drive stock market, could a “flash crash’ happen again?


UBS Loses Huge Auction-Rate Securities Case

Posted by Larry Doyle on August 5th, 2010 7:40 AM |

Morning in America!!!

Are auction-rate securities holders gaining the upper hand against Wall Street in the fight to gain full justice and restitution with penalties for the improper marketing and distribution of ARS? While 2009 brought many judicial and arbitration defeats for ARS holders, lately we witness a shift in the tide. Thank you to a reader of Sense on Cents for sharing that UBS (Union Bank of Switzerland) not only lost an ARS case, but the Swiss bank has to repay ten times the initial ARS investment. WOW!!

What happened here? Why such a large settlement? Let’s navigate as The Wall Street Journal reports, UBS To Pay $81 Million in Auction-Rate Case:

UBS AG has been ordered to pay 10 times the amount a Maryland marketer of cellphones originally invested in auction-rate securities, in another sign of the reckoning still dogging Wall Street for its role in investor losses during the meltdown. (more…)

Franklin Raines Must Have Amnesia

Posted by Larry Doyle on August 4th, 2010 1:25 PM |

Former Chairman and CEO of Fannie Mae, Franklin Raines

Whatever happened to the virtues of taking responsibility and ownership for issues? Why do I hold so many senior executives in our financial industry in disdain? For the very simple reason that I have seen very few of these execs stand up and be counted. All too many of them point the finger elsewhere, use the convenient excuse of ‘the perfect storm,’ or develop a convenient case of amnesia.

Who is a fine examplar of the last category? Former Chairman and CEO of Fannie Mae Franklin Raines who wrote into The Wall Street Journal yesterday on the topic of the demise of our two step-children, Fannie and Freddie. Raines promotes that the downfall of these organizations and the enormous burden they now put on American taxpayers were simply the result of the excessive credit risks taken by Freddie and Fannie from 2005-2007. Raines writes, Poor Credit Judgments Sank Fannie and Freddie:

The facts about the financial collapse of Fannie and Freddie are pretty clear and a matter of public record. (more…)

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