Posted by Larry Doyle on March 11th, 2009 12:54 PM |
I will provide my insights and perspectives on Charlie Rose’s interview of Treasury Secretary Tim Geithner last evening. The interview has been broken down into 6 separate clips, with my commentary preceding each clip.
Part 1
In this clip, Geithner wears both the political and policy hats. While promoting the Obama agenda initially (housing, education, healthcare, energy), he then turns toward the specifics of unlocking the consumer credit securitization markets via the TALF (Term Asset Backed Securities Loan Facility). This facility attempts to restart the securitization market and model which I wrote was broken back on November 12th (The Wall Street Model Is Broken…and Won’t Soon be Fixed). That market provides approximately 40% of the financing to a wide array of consumer finance markets. Geithner attempts to portray a measure of confidence and aggressiveness. The market has currently responded with a vote of no confidence.
Posted by Larry Doyle on March 9th, 2009 3:35 PM |
A great American and loyal reader (thanks FL) shared a report recently produced by not-for-profits Essential Information and The Consumer Education Foundation. This report, Sold Out: How Wall Street and Washington Betrayed America, has gotten little to no attention in the general media. What a shame. I find of particular interest the fact that a number of the currently discussed regulatory changes are directly addressing the points highlighted in this report. I personally view these proposed regulatory changes as substantiating this report and adding credibility to its effort. For the naysayers in the audience, I would ask you to review the report and reconsider your assessment.
I was struck a month ago by the incriminating statements put forth by Senator Chuck Hagel and CIA head Leon Panetta, which I highlighted on February 16th in Legalized Bribery. Those statements bluntly indict our massive system of lobbying, political fundraising, and the quality of those running for elected office! In light of that article, I am more and more convinced that our elected officials have turned their offices into massive for profit machines at the expense of our public well being.
I commend the authors of this report, Roger Weissman and James Donahue, for taking the time and making the extensive effort to expose the truth. The full report, 231 pages in length, spares no detail. In studying it, I found the information and analysis riveting. Let me try to summarize it for you. (more…)
Posted by Larry Doyle on March 5th, 2009 6:37 PM |
Some of my favorite movies are The Sting, Rocky, and Papillon. I could watch those films a few times a year and appreciate the plot, character development, and climax.
In that same vein, for newer readers here at Sense on Cents, I want to highlight a piece I wrote on November 12, 2008. I believe this piece is as clear cut an historical explanation as I have seen to highlight the background of the debacle on Wall Street which precipitated this economic disaster. I also find it interesting as to my comments about potential market reaction to an aggressive tax/spend program under President Obama and a Democratic Congress.
I hope you find this article informative and enlightening: (more…)
Posted by Larry Doyle on March 5th, 2009 12:45 PM |
I had written that yesterday’s 2-3% upward move in the market was very likely a Dead Cat Bounce. Well, that cat is burrowing further into the ground as markets have more than fully retraced yesterday’s upward move and are making new lows. This type of price action, known as lower highs and lower lows, confirms bearishtrends.
I hope our readers know that all financial information you could possibly want is on the Market Datatab on the Sense on Cents header. That resource provided by the Wall Street Journal is not only a great way to get a quick and comprehensive snapshot of all sectors of the market, but also a great way to keep your brokers and financial planners on their toes and working for you!!
Let’s take a quick look at the markets and then I will offer some commentary. (more…)
Posted by Larry Doyle on March 5th, 2009 5:50 AM |
I always maintained that Fannie Mae’s risk management was horrendous. Having engaged this organization in business for many years, it was obvious that their risk was managing them rather than vice versa. While the organization mismanaged risk, their former CEO, Franklin Raines, obviously knew it was prudent to keep expenses down. Franklin Raines, however, knows how to play politics with the best of them and has never let his reputation get in the way of developing marketable relationships.
I wrote about Mr. Raines specifically and Freddie Mac and Fannie Mae in general in a piece last October. I followed that up with a review of Mr. Raines Returns to Washington in mid-December. (more…)
Posted by Larry Doyle on March 4th, 2009 1:12 PM |
Our loyal reader Fiscal Liberal shared a report from Wall Street Watch called Sold Out that I want to make sure is properly highlighted. In this report, I was taken by the quote on page 2 of the executive summary:
the financial sector showered campaign contributions on politicians from both parties, invested heavily in a legion of lobbyists, paid academics and think tanks to justify their preferred policy positions and cultivated a pliant media–especially a cheerleading business media complex.
That statement is a strong indictment of our entire system of government, commerce, academia, and media. It is not a stretch to formulate a tidy little conspiracy. The most important question, though, is who is looking out for the general public?
Thank you Fiscal Liberal for sharing the report. I strongly recommend this piece to everyone.
Posted by Larry Doyle on March 4th, 2009 11:03 AM |
While politicians, bankers, regulators, and commentators can and will point fingers as to where and how our system of financial oversight broke down, make no mistake it was due to too many people making and taking too much money!! I have highlighted the grotesque system of lobbying that has developed and corrupted our society in More Legalized Bribery.
We watch daily hearings on Capitol Hill in the spirit of doing what is right for our country. Please!! Spare me the nonsense and pandering. While collectively we deal with markets that are now down over 50%, the pols and the bankers have effectively robbed the bank and left the taxpayers with the bill to clean up the mess. Barron’s wrote a brief piece on this topic: how the Financial Sector Spent $5 Billion Lobbying Washington Over the Last Decade!!
It is high time we attach names and faces to those politicians and lobbyists who fed at this trough!!
Posted by Larry Doyle on March 3rd, 2009 11:00 AM |
As I continue to develop the product at Sense on Cents, I will look to deliver a variety of angles and perspectives on the markets, the economy, and the world of global finance. On that note, my friends at 12th Street Capital are willing to allow me to share their insights into the mortgage market.
In the spirit of full disclosure, I have no professional relationship with 12th Street Capital. My brother, Kevin Doyle, works at 12th Street and is gracious enough to allow me to share this commentary with you, my readers. As we look to navigate the economic landscape, I thought this 12th Street piece may prove insightful. While there are some technical terms used in this piece, I do not want to edit and have it lose its integrity. Any questions, please do not hesitate to ask!!
Posted by Larry Doyle on March 1st, 2009 3:57 PM |
While our domestic stock markets are down approximately 50% over the last 14 months, there has been a rush of cash into short term money market funds, government bond funds, and in the last few months corporate bond funds and municipal bond funds. As I mentioned in my February 2009 Market Review, I am increasingly nervous about bond investments at this juncture. Why? I’m glad you asked.
1. Primarily due to the massive global government funding needs which are just starting to hit the market. In a recent piece, the highly regarded Financial Times projects global government debt issuance to TRIPLE in 2009.
German Prime Minister Angela Merkel is concerned about European countries looking to tap the markets on or near the same dates. She is proposing global coordination of debt issuance so as to insure that rates are not DRIVEN higher. (more…)
Posted by Larry Doyle on February 28th, 2009 10:13 AM |
Prior to going to the comments section of my son’s report card, human nature dictates that I first look at the grades. In that same vein, let’s see how the markets performed for the month of February:
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Prior to going to the comments section of my son’s report card, human nature dictates that I first look at the grades. In that same vein, let’s see how the markets performed for the month of February:
