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HomeDavid Rosenberg Provides Sense on Cents
Posted by Larry Doyle on January 9th, 2010 1:25 PM |
Those working within any industry are typically restrained in how aggressively they can voice their opinions. If I were still working on Wall street, there is no way I would be able to speak as openly as I do via Sense on Cents. That is simply reality. In similar fashion, those who move from the sell-side (traditional Wall Street banks and brokers) to the buy-side (money managers) are similarly unleashed to more aggressively provide truth, transparency, and integrity on the economy and the markets.
In this vein, I am thrilled to introduce our readers to David Rosenberg, formerly of Bank of America/Merrill Lynch and now Chief Economist and Strategist at Gluskin, Sheff, one of Canada’s top wealth management firms. (more…)
January 9, 2010: Week in Review
Posted by Larry Doyle on January 9th, 2010 11:37 AM |
The economy continues to send very mixed signals. The market screams like a scolded dog. The more things change, the more they stay the same. Welcome to our weekly Sense on Cents Week in Review. I will provide a streamlined recap of the major economic news and the month-to-date market moves. Let’s navigate.
ECONOMIC DATA: (more…)
John Williams Sees Unemployment at 22%
Posted by Larry Doyle on January 8th, 2010 3:15 PM |
What is the real rate of unemployment?
The traditional rate of unemployment, commonly regarded as the U-3, is currently 10%.
Very often, though, we hear reference to the underemployment rate, that is the U-6 rate. The U-6 rate currently sits at 17.3%. This measure encompasses those individuals who desire more hours, are working below their skill set, or are discouraged and have exited the labor pool.
Thanks to SG, I was introduced today to a noted economist who has been tracking an even more encompassing measure of unemployment. Who is this individual? John Williams who operates Shadow Government Statistics.
Walter J. “John” Williams was born in 1949. He received an A.B. in Economics, cum laude, from Dartmouth College in 1971, and was awarded a M.B.A. from Dartmouth’s Amos Tuck School of Business Administration in 1972, where he was named an Edward Tuck Scholar. During his career as a consulting economist, John has worked with individuals as well as Fortune 500 companies.
Williams has developed an even more comprehensive measure of unemployment, known as the SGS Alternate. What does this include? (more…)
Bear Stearns: R.I.P
Posted by Larry Doyle on January 8th, 2010 12:09 PM |
As of today, Bear Stearns is no longer.
What? I bet you’re thinking Bear was taken over by JP Morgan in spring 2008 and ceased to exist when the takeover was approved a few months later. You’d be right. I am right also. How so?
As with many mergers and takeovers, the name of the acquired firm continues to be utilized within certain divisions. That is exactly the case with Bear Stearns, as those two storied names continued to be utilized in the Private Client Services unit at JP Morgan. Until today. (more…)
Unemployment Report: January 8, 2010
Posted by Larry Doyle on January 8th, 2010 9:09 AM |
The widely anticipated January Unemployment Report covering the month of December was just released. Let’s dive right in and take a look at the numbers . . .
I. UNEMPLOYMENT RATE
August: 9.4%
September: 9.7%
October: 9.8%
November: 10.2%…revised to 10.1%
December: 10%
– January Consensus Expectation: 10.0%
– January Actual: 10.0%
>> LD’s comments: unchanged on the month, in line with expectations. The November rate was revised from 10.2% to 10.1%. The underemployment rate worsened to a rate of 17.3% from 17.2%. How do I read this? The rate of decline may be flattening, but there is absolutely no reason to believe this is destined to improve, especially anytime soon. The fact that the underemployment rate inched higher is a stronger sign as to the real health (or illness) of the labor market. (more…)
TCW vs Jeff Gundlach, et al: Getting Ugly Early
Posted by Larry Doyle on January 7th, 2010 8:06 PM |
Jeff Gundlach
It is not often that the top bond manager on Wall Street gets fired. What prompted the unceremonious departure of Jeff Gundlach from Trust Company of the West?
Stories of financial intrigue are always riveting. The real deal of authentic Wall Street financial conspiracies and resulting legal actions are much more riveting. Did Jeff Gundlach and other defendants steal a wealth of TCW proprietary information prior to being shown the door? Did Gundlach, et al commit fraud and a breach of fiduciary duty while at TCW? Did TCW plan to confiscate revenue generated by Gundlach and team?
What are we to make of TCW management’s allegation that they found inappropriate contraband in Gundlach’s office the day he was fired. What sort of contraband? Marijuana, drug paraphernalia, a collection of sexual devices, and hardcore pornographic magazines. (more…)
Healthcare Reform To Make You Ill
Posted by Larry Doyle on January 7th, 2010 4:29 PM |
A loyal Sense on Cents reader asked me to comment on the dramatic rise in health-care premiums highlighted in an article, Soaring Health Premium Just Makes Me Feel Sick, from the Irish Independent. The author, Martina Devlin, writes of an individual in Ireland who just received her new health-care premium. Devlin offers:
I SERIOUSLY debated cancelling my private health insurance recently. When the renewal notice arrived in the post I did a double-take at the size of the bill, cross-checked the increase — which was almost 20pc — and gulped.
Value for money it wasn’t. In fact, it struck me as a hefty charge to cover what I regarded as an insubstantial risk. You can never discount the danger, but I’m still reasonably young and healthy (touch wood).
Reviewing the article immediately reminded me of a conversation that I had with my wife’s cousin, a doctor in a community hospital. I spoke with him over the holidays and asked him his take on the propsects for healthcare reform and legislation here in our country.
His take was as follows: (more…)
Raymond James Apology for Auction-Rate Securities
Posted by Larry Doyle on January 7th, 2010 1:25 PM |
A friend of Sense on Cents informed me the other day that Tom James, chairman and chief executive of Raymond James, issued an apology to the firm’s clients involved in the auction-rate securities fiasco. Wow! Given my keen interest in this topic and my empathy for the investors who have been abused by the industry, my heart raced. An apology by the head of a firm the size and scope of Raymond James is deeply meaningful.
Upon review of the article, Tom James Apologizes for Auction Rate Securities Purchases, published in the Tampa Bay Business Journal, I witnessed that it was written January 5th. Breaking news! Then I realized it was written January 5th but 2009!
Regardless of the fact that the article was published a year ago, I continued reading intrigued to learn more about this situation as it stood a year ago. The Tampa Bay Business Journal reported Tom James saying: (more…)
How Tim Geithner Screwed the American Taxpayer
Posted by Larry Doyle on January 7th, 2010 9:31 AM |
Tim Geithner, then head of the New York Fed, blinked and screwed the American taxpayer out of billions of dollars in the process. How so?
Geithner and his cronies in Washington have misrepresented–if not outright lied–about the payments to both domestic and foreign banks in settling exposures to then failing AIG. While politicians and pundits alike will reference the precarious nature of the time and heat of the moment to defend Geithner and his cronies, the simple fact is the settlement of the AIG swaps at 100 cents on the dollar was nothing short of one of the greatest heists in our country’s history.
This heist transferred multiple billions of dollars from the American taxpayer to the likes of Goldman Sachs, JP Morgan, Societe Generale, and many more domestic and foreign banks as well. (more…)
Should Uncle Sam Bailout California?
Posted by Larry Doyle on January 7th, 2010 8:07 AM |
Should 49 states bail out one? Should the American public be compelled to cover the fiscal disaster of our largest state? Will America ever face reality?
The ticking time bomb that is the fiscal disaster of the state of California is making its way to Washington. As reported in yesterday’s Wall Street Journal, the Governator Arnold Schwarzenegger Seeks U.S. Funds. If Uncle Sam bails out California, then who is next?
Not surprisingly, the general media is not giving this story even close to the attention it deserves. I wrote extensively on this ticking time bomb last spring and summer. Tick…tick…tick. The fuse is running short.
Let’s quickly review some general statistics about the state on our Left Coast (in more ways than one). As I highlighted last May in writing “As California’s Economy Goes, So Goes the Country,” California has:
– 8 of the 50 largest cities
– population of approximately 37 million people (that we know of), a full 12% of our national population
– an economy similar in size to Italy, ranking it as one of the top 10 in the world (I have seen rankings of 8th and 9th)
– California’s economic output represents 13% of our national GDP!!
– an unemployment rate north of 11% compared to the national average of 8.9%. With a high unemployment rate amongst illegal immigrants, it is not a stretch that California’s unemployment rate is approaching 15% and its underemployment rate is greater than 20%!! (LD’s edit, the current rate is 12.3%).
What is Schwarzenegger’s case? The WSJ reports: (more…)
