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Archive for September, 2010

FINRA vs Amerivet Attorneys: Mano a Mano

Posted by Larry Doyle on September 30th, 2010 8:29 AM |

Will America ever learn what truly transpired within Wall Street’s self-regulatory organization, FINRA? Will FINRA be allowed to placate its members and America while not addressing the hard questions those constituencies want answered?

FINRA member firms voted overwhelmingly in support of a number of non-binding proxy proposals sponsored by Amerivet Securities. I highlighted the overwhelming vote in my August 14th commentary, FINRA Gets New ‘Sheriffs’; Amerivet Proxy Proposals Approved!! Well, I know that our financial regulatory system is far from democratic but FINRA’s response to the overwhelming votes leads one to believe FINRA looks to redefine the term, “autocratic.” Let’s review the FINRA statement and the counterpunch provided by the attorneys representing Amerivet Securities. (more…)

Wall Street Arbitration “Going Public” but FINRA Owes America A Lot More Than That

Posted by Larry Doyle on September 29th, 2010 4:49 AM |

Those who care about truth, transparency, and integrity while navigating our financial markets and economic landscape won another round in our ongoing battle today. How so? As with any business, disputes and disagreements will always occur. How those disputes are adjudicated has always been a subject of much consternation on Wall Street and more so throughout America. Why? Many investors felt the mandated arbitration process disadvantaged investors against Wall Street firms because the arbitration panel has traditionally consisted solely of industry representatives. That standard went through a trial change. That trial change is now being proposed to be made permanent. Think Wall Street and FINRA are beginning to understand how America truly feels? Wall Street’s self-regulatory organization FINRA released the following statement today:  (more…)

Peter Weinberg ‘Tells It Like It Is’

Posted by Larry Doyle on September 28th, 2010 7:50 AM |

I first introduced readers of Sense on Cents to Peter Weinberg a year ago when I wrote, Wall Street “Skin” Needs to Thicken. Weinberg was not reticent then in highlighting Wall Street’s misaligned incentive compensation system which clearly practiced the “heads I win, tails you lose” model. The other day, the Financial Times ran a clip in which Peter Weinberg once again provides a refreshing and honest perspective on our markets, economy, Wall Street, Washington, and the global economic landscape. This 8-minute video distinguishes Weinberg as an individual not beholden to special interests or talking his ‘book.’ In fact, I would say Weinberg provides a wealth of ‘sense on cents.’ Clicking on the image below will redirect you to the video clip at the Financial Times.

Larry Doyle

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I have no affiliation or business interest with any entity referenced in this commentary. As President of Greenwich Investment Management, an SEC regulated privately held registered investment adviser, I am merely a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

Economics: An Art or a Science? Checking in with Rick Davis of Consumer Metrics Institute

Posted by Larry Doyle on September 27th, 2010 7:21 AM |

The study of human behavior may be considered a science but to me it is the greatest and most challenging of arts. Why is that? For the very simple reason that while we are limited in the ability to study human behavior by reviewing the past, we are challenged by the fact that future behaviors are forever changing. The lessons of the past often do repeat themselves in the future; however, the environment of the PRESENT has NEVER truly been experienced so our current and future behaviors are so hard to forecast. Thus, is economics more art or science? Perhaps we can cover both bases and call it as much an art as a science especially in the Uncle Sam Economy circa 2010.

I raise this topic based upon a recent commentary put forth by a Sense on Cents favorite site, Consumer Metrics Institute. Rick Davis continues to paint an exquisite work as he recently penned, The Diverging GDP,

Prior to each revision to the GDP we are asked for insights into the likely course of those corrections from the Bureau of Economic Analysis (“BEA”) of the U.S. Department of Commerce. Most of the questions we have received recently center on the increasing divergence of our Daily Growth Index from the BEA’s GDP over the past couple of quarters: (more…)

Jason Zweig Interview with Seth Klarman: Strongly Recommended

Posted by Larry Doyle on September 25th, 2010 10:22 AM |

Patience is a virtue.

Wall Street is neither a patient place, nor a patient industry. Our nation is now paying a very steep price for the perpetual short term mentality that continues to dominate our financial system and permeate our nation.

I strongly believe we need to shirk those who make different recommendations every other day. We need to embrace those who have a more macro view of the world and our markets and the insights to navigate accordingly. While many may profess to have these skills and perspectives, very few distinguish themselves like The Baupost Group’s Seth Klarman. (more…)

“A Blow to Mary Schapiro”

Posted by Larry Doyle on September 24th, 2010 8:20 AM |

The battle for truth, transparency, and integrity within the ring of our economic landscape is nothing short of a 15-round heavyweight brawl. With many rabbit punches thrown by those embedded in the Wall Street-Washington incestuous relationship parried and countered by those who want the aforementioned virtues, this encounter would be great entertainment if it were not so serious and impactful on our nation’s well being. Breaking news last night clearly had the judges giving the most recent round in this pugilistic engagement to those in the transparency corner. Let’s wind the tape and get after it.

With news that both Houses of Congress have now voted to repeal the SEC’s exemption from FOIA (Freedom of Information Act) requests, our ongoing pursuit of truth, transparency, and integrity won a round — but not yet the fight — yesterday. For those unaware of this story, I will offer some highlights, add some between round commentary, AND then ask the hard hitting questions you will most assuredly not see elsewhere.


CFOs Feeling Like Sisyphus

Posted by Larry Doyle on September 23rd, 2010 12:47 PM |

The lessons of history are so great. Regrettably, all too often those lessons are not fully learned and are thus repeated. My days at Boston Latin School in the early ’70s introduced me to the great ancient civilizations of Greece and Rome. The stories of the battles, the empires, the pride, and the downfalls held many lessons which stay with me to this day. These memories came back to me this morning as I reviewed a recent poll of our nation’s CFOs. Let’s look both forward and backward as we review CFO Magazine’s That Sinking Feeling, Again:

Optimism about the U.S. economy has fallen back to recession levels among U.S. chief financial officers, despite the fact that they expect earnings to grow by 12% in the next 12 months and capital spending to increase by 7%. (more…)

Have You Checked Your New Health Insurance Rates?

Posted by Larry Doyle on September 23rd, 2010 7:25 AM |

Our economy is experiencing disinflation and trending towards deflation, right? Well, it looks like the health insurance industry did not get that memo. If rates do go up, they can’t be more than a few percent, right? Wrong!!

Although this issue is not getting the attention it deserves, once again those footing the bills in our nation are getting bent over. In my home state, a recent story highlighted Health Insurers Seeking Rate Hikes of More Than 20 Per Cent in Connecticut:

Health insurers are asking for immediate rate hikes of more than 20 percent in Connecticut for some plans, citing rising medical costs and federal health reform laws as reasons.

Both issues — the new federal health care reform and rising medical costs — are significant drivers of the increases, according to filings by insurers with state regulators that were reviewed by The Courant. (more…)

Does Larry Summers Need a Break?

Posted by Larry Doyle on September 22nd, 2010 2:07 PM |

In light of the recently released news that Larry Summers will be leaving the White House National Economic Council later this year, I am compelled to ask whether Larry needs a break. What’s that you say? Break? What type of experience does Larry have with breaks? Great question. Glad you asked. Can we ever forget Larry’s performance in early 2009? Let’s rewind the tape as I highlighted, Not Again, Larry!!,

I wish I were joking, but Larry Summers, Director of the National Economic Council, has been caught yet again sleeping on the job. Today Summers was caught on camera taking 40 winks during a meeting with President Obama and credit card officials:

If you remember, Summers was caught nodding off during a fiscal sustainability summit held back in February at the White House. (more…)

What Is a ‘Walking Pneumonia’ Economy?

Posted by Larry Doyle on September 22nd, 2010 5:12 AM |

Almost three full years from the official start of The Great Recession and fifteen months from its end, and our economy continues to limp along and languish amidst the weight of ongoing — even unrecognized — debts. Can we take a double dose of Nyquil, chase it with some Irish Mist, and hope we wake up feeling better in the morning? If it were only that easy.

The simple fact is our economy is battling a serious bout of seemingly terminal ‘walking pneumonia.’ How might we diagnose that malady? All we need to do is read yesterday’s Release from the Federal Reserve:

Information received since the Federal Open Market Committee met in August indicates that the pace of recovery in output and employment has slowed in recent months. (more…)

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