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HomeWhat Does Bernanke Mean by ‘Transitory’?
Posted by Larry Doyle on April 28th, 2011 9:05 AM |
I encourage you to read this piece in its entirety. It is not overly long and we have a little fun at the end. Thanks. LD
Transitory.
I am now regularly hearing the use of this singular term by our chief central banker, economic pundits, media mavens, and assorted other public officials.
Transitory? What does it really mean?
Yesterday, the Federal Reserve utilized this term in the Fed’s official release:
Increases in the prices of energy and other commodities have pushed up inflation in recent months. The Committee expects these effects to be transitory, but it will pay close attention to the evolution of inflation and inflation expectations. (more…)
Are Student Loans an Impending Bubble? Is Higher Education a Scam?
Posted by Larry Doyle on April 26th, 2011 9:00 AM |
What did we experience in the sub-prime housing debacle?
1. Shoddy underwriting standards for borrowers.
2. A massively flawed system promoted and perpetuated by the Wall Street securitization business.
3. Borrowers overleveraged leading to skyrocketing rates of foreclosures and defaults.
4. A mentality that housing finance could promote a real social benefit and a profitable enterprise.
5. A government backstop and ultimate bailout for investors.
6. An ultimate fiasco for our society as a whole.
Have we learned our lessons from the sub-prime housing nightmare? Could we possibly be going down the same path in another segment of our economy? Yesterday a reader inquired if I had addressed the potential impending fiasco in student loans. This morning I discussed the cost of higher education with my better half. Will our economy be able to generate both the jobs and income levels for students to manage their increasing levels of indebtedness? (more…)
Sense on Cents Central Station
Posted by Larry Doyle on April 22nd, 2011 8:14 AM |
A few years back when I had just launched Sense on Cents, I would host formal weekly exchanges with readers. This forum, entitled Sense on Cents Central Station, allowed readers an opportunity to ask questions, make comments, or shout from the mountaintop (how many currently feel like saying, “I’m pissed and I’m not going to take it anymore!!” More than a few I’ll bet.). Are there specific financial or economic topics you would like me to address now? Ask away.
Given all that is going on in our world and in each and every large city and small community within our own country, I firmly believe people want a voice and to know that somebody is listening. You have it right here. What is on your mind? Speak out. Inquire. Do not be bashful. Are there questions you have as you navigate your own personal economic landscape that I might be able to address? Collectively we can help each other.
As a disclaimer, I am not a financial planner.
Sticking with the theme of this thread, “All aboard….”
Oscar Winner Charles Ferguson Rips Wall Street and Washington
Posted by Larry Doyle on February 28th, 2011 5:28 AM |
Charles Ferguson
“Forgive me, I must start by pointing out that three years after our horrific financial crisis caused by financial fraud, not a single financial executive has gone to jail, and that’s wrong.”
With those words last evening, Charles Ferguson, the winner of the Academy Award for Best Documentary for his film Inside Job, did a lot more than merely begin an acceptance speech. Ferguson touched the third rail and made a political statement. But did he really? Really? Not in my opinion. Ferguson spoke the truth.
When did the mere voicing of the truth become political? Perhaps in America 2011 those who speak the truth actually stand out because we hear so little of the prized virtue. That reality is a sad commentary on our society.
I commend Ferguson. Backstage he had even more to say. (more…)
From Madison, Wisconsin to the Shores of Tripoli
Posted by Larry Doyle on February 22nd, 2011 7:22 AM |
What do I see as recurring themes on our global economic landscape? Unrecognized financial losses lead to overreaching economic programs. Those programs influence political change, but also ultimately varying degrees of social and civil unrest.
Over the course of the last year, we have witnessed differing iterations of this scenario play out in Greece, England, Ireland, and elsewhere. The current hotspots on our global map are Middle Eastern and northern African nations, specifically Libya. The distance from Tripoli, Libya and Cairo, Egypt to Madison, Wisconsin is approximately 5000 miles and 6000 miles respectively. Is the distance between these locales actually much closer than that? Are there any similarities to the bloodshed being experienced in Tripoli, and previously Cairo to the tame protests on the university town of Madison, Wisconsin?
I believe there are. Recently, Wisconsin Representative Paul Ryan made this comparison as well. Let’s view Ryan’s comment and then navigate further.
Regardless of what you think of Ryan, I do believe there are real similarities between the unrest in the Middle East and that on display in Madison. How so? Well, what is the basis for the unrest in the Middle East? Rent.
What are you talking about, LD? What the hell is rent? (more…)
February 14, 2008-2011: Auction Rate Securities Nightmare Continues
Posted by Larry Doyle on February 14th, 2011 7:36 AM |
“Take it, Phil. It’s free money.”
With that statement the saga of noted author Phil Trupp into the world of auction-rate securities commenced. Phil’s nightmare experience with auction-rate securities mimicked that of so many other tens of thousands. Three years to the day after the ARS market totally collapsed, that nightmare in which investors remain unable to access their cash from their supposed cash-alternative investment continues.
Selected financial regulators, such as FINRA, have the balls to promote the success they have had in recouping ARS investors funds. Let the record show, though, that three years to the day when the ARS market froze, approximately 40% of investor funds remain frozen. Their nightmare continues. Who is standing up and fighting for these ARS investors? (more…)
Lieutenant Colonel Elton Johnson on Way to Afghanistan Calls Out Finra…AGAIN!!
Posted by Larry Doyle on February 11th, 2011 7:07 AM |
I first wrote about Wall Street’s self-regulatory organization, FINRA (the Financial Industry Regulatory Authority) in January 2009. At that point and ever since I have believed strongly that for a revitalization of the health and confidence of our capital markets, our economy, and ultimately our nation itself that FINRA needed to become a MUCH more transparent organization. Regular readers of Sense on Cents know how passionately I feel.
Regrettably, though, outside of those regularly involved in the financial industry, I believe few people in our nation even know who FINRA is or what they do regulating Wall Street. I strongly believe that reality needs to change. Who would seem to share my belief? Amerivet Securities’ Lieutenant Colonel Elton Johnson, a member of the United States Army Reserve. (more…)
“There’s No Sense of Urgency” in Washington
Posted by Larry Doyle on February 10th, 2011 7:35 AM |
For those critical of Ben Bernanke and his massive bubble inducing, asset inflating quantitative easing program, Ben and his Federal Reserve friends have something to say to you. What wisdom do these banking behemoths have to share? Are you sitting down? In so many words, Bernanke and company offered that ‘if you think we’re bad, you should really focus on the clowns who have run up the out of control federal deficit.’
Wow!
Do two wrongs make a right? Does digging one hole get us out of another? Does a series of left hand turns ultimately bring us right back to where we began? Does anybody in Washington have the character to address our real structural problems? Does pointing fingers really get us anywhere? Why are we faced with these questions and problems? A lack of real leadership. (more…)
Walter Williams: “Politicians Exploit Economic Illiteracy”
Posted by Larry Doyle on January 22nd, 2011 8:14 AM |
Walter Williams
Prior to reading the Weekend Interview in this morning’s Wall Street Journal, I had never heard of Walter Williams. After reading this interview, I will be looking for more of Williams’ work. What really struck me this morning about the George Mason University economist? He badly wants the truth and he embodies the best of ‘sense on cents’ in pursuing it. How so? Do you have any doubts that Williams nails the truth after reading:
Over the decades, Mr. Williams’s writings have sought to highlight “the moral superiority of individual liberty and free markets,” as he puts it. “I try to write so that economics is understandable to the ordinary person without an economics background.” His motivation? “I think it’s important for people to understand the ideas of scarcity and decision-making in everyday life so that they won’t be ripped off by politicians,” he says. “Politicians exploit economic illiteracy.”
Amen!! (more…)
