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HomeFebruary 20, 2010: Market Week in Review
Posted by Larry Doyle on February 20th, 2010 7:54 AM |
Markets rebounded strongly this week. In the process, most of the major market equity averages, commodity indices, and bond ETFs recouped January’s declines and are now back close to their December 31, 2009 levels. What happened?
Welcome to our Sense on Cents Week in Review where I provide a streamlined recap of the major economic data and news, along with month-to-date market returns.
ECONOMIC DATA
A lot of news and data this week. Some good. Some not so good. Let’s dive right in. (more…)
As for Tiger Woods . . . Who Cares?
Posted by Larry Doyle on February 19th, 2010 9:00 AM |
Image is everything, especially when the reality of a situation is vastly different than the image itself. Regrettably, our nation all too often is far more caught up with image than reality.
As long as the market is up, does it really matter what the underlying fundamentals might be? As long as my team is winning, does it really matter what may be going on behind the scenes? As long as companies generate revenue, does it really matter how the register is being rung?
While I have limited interest in judging people’s personal behaviors, I have no interest in being inundated with images of perfection and serenity when the reality belies this image. (more…)
Fed Hikes the Discount Rate….$urprisingly Quick
Posted by Larry Doyle on February 18th, 2010 4:50 PM |
The Federal Reserve indicated on February 10th it was going to raise the discount rate ‘before long.’ Well, in this case, Ben Bernanke is a man of his word as the Fed just raised the discount rate by 25 basis points (.25%) effective tomorrow.
While many market participants had minimized the potential rise in the discount rate as not being significant, I was not and am not in that camp. In fact, the speed with which Bernanke raised the rate after indicating that he would do so ‘before long’ has caught the market by surprise.
What is the immediate market reaction? (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
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…)
Richard Bernstein, Michael Farrell, Caroline Sayan Provide ‘Sense on Cents’
Posted by Larry Doyle on February 18th, 2010 7:09 AM |
Sense on Cents looks to cover risks and developments across the global economic and financial landscape. In that vein, how convenient to observe a brief, 7-minute video that highlights the ups and downs in our economy, equity markets, housing, mortgage markets, interest rates, and art markets.
In this video segment from WealthTrack, Consuelo Mack interviews Richard Bernstein (formerly of Bank of America and Merrill Lynch, and now head of his own firm), Michael Farrell of Annaly Capital Management, and Caroline Sayan of Christies.
I found this clip to be informative and enlightening across a wide swath of our economic landscape. Clicking on the image will bring you directly to a video player where you can watch the interview.
Enjoy!!
LD
Goldman Sachs: ‘The Great Enabler’
Posted by Larry Doyle on February 17th, 2010 2:28 PM |
As more details are released about Goldman Sachs’ derivative transactions that allowed Greece to disguise its overall financial health, the question begs as to the integrity of this very storied Wall Street franchise. In short, I would define Goldman Sachs as ‘The Great Enabler.”
How did ‘The Great Enabler’ operate? Recall that Goldman CEO Lloyd Blankfein indicated a few months back that Goldman Sachs was doing “God’s work.” He failed to mention that the deity to which Goldman prayed bleeds green. Additionally, the prayer which Goldman offered was nothing more than ‘maximize revenues now, worry about problems later, and keep your mouth shut.’
For a peek inside Goldman’s prayer book, let’s review a recently released report from Bloomberg, Goldman Sachs, Greece Didn’t Disclose Swap Contract:>>>> (more…)
Why Would China and Japan Stop Buying Our Debt?
Posted by Larry Doyle on February 17th, 2010 12:19 PM |
Our wizards in Washington should not be so naive to think foreign buyers, especially from Asia, will continue to finance our debt at current rates and at current levels. News yesterday that China is no longer the largest holder of our Treasury debt should not be discounted.
What are the ramifications for our nation if China and other foreign buyers decline to purchase our debt or – even worse – actually start selling even more of their current holdings? A quick and violent move higher in our domestic interest rates.
Don’t think it could happen? Think again. (more…)
Judge Rakoff Orders FINRA Documents to Remain Sealed
Posted by Larry Doyle on February 17th, 2010 9:26 AM |
Nobody ever said it was going to be easy.
The pursuit of truth, transparency, and ultimate integrity in our financial regulatory system can only be equated to a 15 round heavyweight fight. Yesterday, the sting of opposing blows landed hard upon our face as Judge Jed Rakoff ordered FINRA documents relating to the very formation of this Wall Street self-regulatory organization to remain sealed.
Recall that the request to unseal these documents was made by attorneys representing Dow Jones, Bloomberg, and The New York Times. From the blogosphere, Sense on Cents also wrote to Judge Rakoff requesting that he order these documents to be unsealed. The information embodied in the documents addresses an allegation made by attorneys representing a plaintiff, Standard Investment Chartered, in a lawsuit filed against FINRA. The crux of that lawsuit is that then FINRA head (and current SEC Chair) Mary Schapiro and her fellow FINRA executives lied verbally during roadshows and in writing via the proxy statement issued for the merger of the NASD and NYSE Regulation to form FINRA. (more…)
Tuesday Afternoon Funnies
Posted by Larry Doyle on February 16th, 2010 3:17 PM |
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