Archive for September, 2010
Posted by Larry Doyle on September 21st, 2010 12:02 PM |
What is holding back our economy? Why isn’t there more credit available in our banking system?
I have answered these questions numerous times over the last two years BUT many in Washington pretend not to know the answer and pander to their constituencies in the process. Regular readers of Sense on Cents are well aware that the books of our banks–especially our largest money center banks–remain chock-filled with loans that are being valued far in excess of what they are truly worth. Let’s navigate.
I first addressed issues within the second mortgage and HELOC (home equity line of credit) space in Fall of 2008 (Sense on Cents/Second Mortgages). Here we are a full two years later and America still has not received a straight answer and a full accounting by the banks or their regulators as to this “sinkhole” on their books and in our economy.
Let’s dive into this hole, get a little dirty, and again expose the issues within this sector. (more…)
Tags: 12th Street Capital, American Banker, Anthony Sanders, Anthony Sanders of George Mason University, bank regulators, Bryan Hubbard, Catch-22, cooking the books, CoreLogic, ginat elephant in the room, helocs, home prices, housing, Housing Crisis, Jerry Dubrowski, Kevin Doyle of 12th Street Capital, Larry Doyle, Michael Cavanagh of JP Morgan, Mortgage Crisis, mortgage delinquencies, mortgage foreclosures, OCC, Rebel Cole of Depaul University, second liens, second mortgages, Sense on Cents, strategic defaults, underwater mortgages, Why Writedowns on Second Mortgages Are So Scarce
Posted in General | 10 Comments »
Posted by Larry Doyle on September 21st, 2010 5:51 AM |
Although our elected officials in Washington and around our country typically have foresight that lasts no longer than 24 months (every other November that is), the simple fact is our economy runs in much longer cycles and has a much deeper foundation than that.
To that end, how does America reconcile an economy which is fundamentally broken while simultaneously electing officials who will not make promises that can’t be kept but promise sacrifices which must be borne? If these officials can get elected at all (a big “IF,” mind you!!), perhaps they can get America to read and appreciate the sharp mind of an economist such as the Sense on Cents All Star Kenneth Rogoff. (more…)
Tags: background of kenneth rogoff, Carmen Reinhart and kenneth Rogoff, economic outlook, IMF, Kenneth Rogoff, Larry Doyle, pied pipers touting quick fixes, Project Syndicate, prospects for us economy, recovery after economic crisis, Sense on Cents, structural economy, This Time Is Different, U.S. economy, where are the jobs, who is kenneth rogoff, Why America Isn't Working, why isn't america working
Posted in General | 5 Comments »
Posted by Larry Doyle on September 20th, 2010 7:13 AM |
What can we believe? Can we believe the economic reports put forth by our government? Can we believe the quarterly reports put forth by our financial institutions? Can we believe the price action in our markets? While “the market is the market,” has our country ever experienced a period in which there is such a massive disconnect between the real economy and what Uncle Sam has generated?
I am often reminded of the fabulous hit movie, The Truman Show, when thinking of our current economy and markets. How much of our economy is based on reality and what is merely staged? Bloomberg’s Jonathan Weil once again distinguishes himself in providing an “economic and market reality check” of our ‘Uncle Sam’ economy circa 2010. Weil writes, Zombie Banks Have Us Right Where They Want Us:
Two years after the collapse of Lehman Brothers and what rightfully should have been the death of American International Group, U.S. capital markets face a crucial question.
How long will it take before we see some semblance of robust free-market capitalism return, where the value of an asset is based on what bona fide market participants will pay for it, the cost to borrow money is based on a company’s fundamental financial strength rather than its ability to access a government safety net, and corporations are free to fail no matter what their size? (more…)
Tags: AIG, aig bondholders, ally bank, american international group, americredit, Bloomberg's Jonathan Weil, Dodd-Frank Act, free market capitalism, Jim Carrey, Larry Doyle, lights camera action, michael carpenter, our economic reality, our economy is not real, Sense on Cents, The Truman Show, too big to fail, Wall Street, Weil Zombie Banks Have Us Right Where They Want Us, who is jonathan weil
Posted in General | 4 Comments »
Posted by Larry Doyle on September 19th, 2010 7:08 AM |
In light of the ongoing decline in equity volumes, I found a short piece in this weekend’s Wall Street Journal to be of special interest. Jonathan Cheng writes, Hello, Is There Anybody In There?
Are trading volumes ever coming back? With options expirations and index rebalancing on the agenda, today could be a decent one for trading volumes, which Peter Boockvar of Miller Tabak notes haven’t hit the 5 billion shares mark in NYSE Composite volume since July 16. Mr. Boockvar cites “confusion” as the culprit, given all the economic uncertainties facing investors.
Rick Bensignor, chief market strategist at Execution Noble, however, chalks it up to something perhaps more fundamental: there aren’t many investors out there to begin with, which he says are likely to keep volumes anemic for the foreseeable future. Here’s his tally: (more…)
Tags: declining equity volumes, equity trading volumes, hedge funds disappearing, hellos, is there anybody in there, is there anybody out there, jonathan cheng, Larry Doyle, may 6th flash crash, NYSE composite, peter boockvar of miller tabak, retail investors, rick bensignor of execution noble, Sense on Cents, wall street proprietary trading desks, why are equity volumes declining
Posted in Equity Markets, General | 3 Comments »
Posted by Larry Doyle on September 18th, 2010 12:14 PM |
LD’s edit: Thank you to a Sense on Cents reader, Transparency, for informing us that Senate Judiciary Committee Approves Bill To Repeal SEC FOIA Exemptions.
Thanks to a loyal reader of Sense on Cents for sharing this press release put forth earlier this week. Not that the Republican Party does not have a LOT to answer for in terms of the final Financial Regulatory Reform, but at least on this front, I commend Darrell Issa (R-CA) for introducing this legislation.
Issa Introduces the SEC Freedom of Information Restoration Act
President Obama at Signing of Financial Reform Bill: “It demands accountability and responsibility from everyone…It demands accountability and responsibility from everyone…And we all win when folks are rewarded based on how well they perform, not how well they evade accountability.” (more…)
Tags: Aaron Schock, Allen Stanford, Angela Canterbury, Barack Obama, Bernie Madoff, Bill Shuster, blaine leutkemeyer, Brian Bilbray, Dan Burton, Darrell Issa, Dodd Frank Wall Street reform and Consumer Protection Act, finreg, FOIA, Freedom of Information Restoration Act, Gary Aguirre, Issa Introduces the SEC Freedom of Information Restoration Act, jason Chaffetz, Jeff Fortenberry, jim jordan republican of ohio, John Duncan, John Mica, oversight and government reform committee, Patrick McHenry, rule 9291, sec failures in madoff and stanford scams, section 9291, Spencer Bachus, Wall Street-Washington incest
Posted in General | 4 Comments »
Posted by Larry Doyle on September 18th, 2010 11:33 AM |
Saturday morning in America and life is good.
Yesterday, I gave major props to our great American Gary Aguirre for addressing critically important issues embedded in the recently enacted Financial Regulatory Reform package which allows further FOIA (Freedom of Information Act) exemptions by the SEC. (Aguirre wrote a fabulous dissertation in the September Wall Street Lawyer, which I embedded in my commentary.) I qualified yesterday’s commentary, Great American Gary Aguirre “Cross Examines” in re: SEC’s FOIA Exemptions, as perhaps the most important and enlightening ever put forth at Sense on Cents. I truly believe that. Gary Aguirre is a great American.
He has company. (more…)
Tags: Aguirre vs SEC, Angela Canterbury testimony, Art Samberg Pequot investigation, Barney Frank, Christopher Dodd, Consumer Protection Act, Darrell Issa on SEC freedom of information exemptions, Dodd-Frank Wall Street Reform, economic crisis, fight for transparency, financial regulatory failures, Fox Business News FOIA request, House Financial Service committee on SEC FOIA, increased transparency and accountability, John MAck Pequot investigation, keep punchin, Larry Doyle, POGO, project on Government Oversight, SEC FOIA exemptions, SEC's failures in MAdoff and Stanford cases, SEC's New Confidentiality Provisions, Sense on Cents, systemic regulatory failures, Wall Street-Washington incest, what is 929I provision, what is FOIA, who is Angela Canterbury
Posted in General | 1 Comment »
Posted by Larry Doyle on September 17th, 2010 8:03 AM |
I truly believe this could be the single most important and enlightening commentary ever put forth at Sense on Cents. Although it is a little lengthy and has some legalese, if you care about truth, transparency, and integrity in our nation, take the time to read and review. You will be better for it. I encourage you to share it with friends and colleagues.
Washington still does not get it.
I strongly believe the deeply embedded Wall Street-Washington incestuous relationship was central to the erosion of our economic foundation. While that incest must be extirpated if we are to regain our economic standing, we continue to suffer through “show trials” dealing with the critically important topic of pursuing transparency across our political and financial landscape. Regrettably, the media in general provides limited coverage to this ongoing pursuit. To that end, I welcome banging this drum and engaging those in our nation who will ask the hard questions and put forth aggressive propositions so real transparency can be achieved. Even if the pursuit comes up short, the effort and goals are beyond worthy. Let’s navigate.
Yesterday, the House Financial Services Committee chaired by Barney Frank held a hearing to address the SEC’s exemptions from Freedom of Information requests embedded in the Financial Regulatory Reform legislation. Congressman Frank rolled out the red carpet to SEC Chair Mary Schapiro. From the testimony, Frank offers: (more…)
Tags: 929I, Aguirre Pequot Capital Art Samberg, Barney Frank, financial regulatory reform, finreg, FOIA, freedom of information, Gary Aguirre, Gary Aguirre John Mack, House Financial Services, Mary Schapiro, Robert Khuzami, SEC FOIA exemptions, SEC OCIE, SEC OIG David Kotz, September Wall Street Lawyer, Wall Street-Washington incest, what is 929I, who is Gary Aguirre
Posted in General | 13 Comments »
Posted by Larry Doyle on September 16th, 2010 7:36 AM |
Information is everything.
Without access to information, how can we ever learn the full and true stories currently buried beneath our financial and economic landscape? Unearthing information through every means possible is a tedious — but necessary — pursuit if we are ever to learn our mistakes and failings of the past so that we can improve our economic standing in the future.
While those in Washington would maintain that they are charged with unearthing this information, there is little doubt that the American populace at large has little confidence in the rigor of that pursuit. The greatest of Jesuit principles instilled in me from my days at Holy Cross is the ‘never ending pursuit of the truth.’ That pursuit brings us today to a story which has received significant coverage here at Sense on Cents, but not nearly enough coverage elsewhere. Let’s navigate as The Wall Street Journal writes, SEC Looks to Allay Fears on FOIA Limits: (more…)
Tags: College of the Holy Cross, financial regulation, financial regulators, fouding principles of Jesuits, freedom of information act, Holy Cross, Jesuit education, Jesuit principles, Larry Doyle, Mary Schapiro, never ending pursuit of the truth, pursuing the truth, SEC and FOIA, SEC oversight of FINRA, SEC regulation of FINRA, Sense on Cents, the Jesuits, transparency and disclosures o
Posted in FINRA, General, SEC | 4 Comments »
Posted by Larry Doyle on September 15th, 2010 2:16 PM |
I will never forget the mental and emotional sensation of purchasing my first real asset. That holding, a co-operative apartment in Brooklyn, New York was where I began my married life and started my family. I am not writing this to reminisce about life back in the mid-’80s, but rather because those memories came back to me as I read an article in this morning’s Wall Street Journal entitled, Obstacle to Deficit Cutting: A Nation on Entitlements:
Efforts to tame America’s ballooning budget deficit could soon confront a daunting reality: Nearly half of all Americans live in a household in which someone receives government benefits, more than at any time in history.
I have zero problem with people receiving benefits. To the extent that people have earned the benefits, let’s make sure that we take care of our elderly and ill. I am happy to be the first in line to make these payments.
At the same time, the fraction of American households not paying federal income taxes has also grown—to an estimated 45% in 2010, from 39% five years ago, according to the Tax Policy Center, a nonpartisan research organization.
This factoid, though, leaves me with an entirely different feeling. (more…)
Tags: budget deficit, deficits, entitlements, federal tax rolls, obstacle to deficit cutting a nation on entitlements e, percentage of people paying federal taxes, renting vs owning
Posted in General | 3 Comments »
Posted by Larry Doyle on September 15th, 2010 7:00 AM |
With the most important elections in our lifetime — since the last election at least — less than 8 weeks away, the pulse of the country is clearly beating and sending a strong message. What is the tone of that message? Americans are increasingly sickened by the standard ‘business as usual’ politics and are getting ready to ‘throw the bums out.’
In light of the disasters that have played out on our political and economic landscapes, can you blame America at this juncture for harboring these feelings? If you have any appreciation for ‘sense on cents,’ America’s voice is resonating with a message that newcomers certainly can not be any worse than the stale crowd and establishment politics promoted by party machines. (more…)
Tags: election results fall 2010
Posted in General | 7 Comments »
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