Larry Doyle's Blog, page 4

GDP Review: How’s Our Economy ‘Really’ Doing?

Most pundits and analysts will understandably try to hype the better than expected 4% growth rate of 2nd quarter GDP reported this morning.

I get it.

Some might temper the hype by highlighting that growth in inventories accounted for approximately 1.7% of the growth. Others might choose to direct attention to the fact that the disappointing 1st quarter GDP was actually revised to a -2.1% level from the -2.9% posting previously reported. Still others will point toward the positive developments within the consumer spending data.

Yes, most of this information has a positive bent to it but is this to say that we have a meaningfully positive trending economy that will drive growth in full-time, high paying jobs? 

Count me as suspect on that front.

The noise within the underlying components and the volatility of the revisions compels me to take a step back from a quarterly report so as to gain a wide-angled view of our overall economic health and well being.

While most if not all of our media outlets, market strategists, and Washington sycophants will try to ‘talk’ the economy up, who out there will inform you that full year growth for both 2011 and 2012 were revised meaningfully downward. Is that right? Yep, that’s right. How far downward? Check this out as reported by MarketWatch:

The increase in gross domestic product in 2011 was lowered to 1.6% from 1.8% and it was trimmed to 2.3% from 2.8% for 2012 . . .  As a result of the changes, the economy expanded at a 2.0% rate from 2011 to 2013 instead of 2.2% as previously reported.

The negative revisions to full year GDP reports strikes me as standard operating procedure. Quarterly reports can and will generate some real volatility so as to make it challenging to ascertain how the economy is really doing.

But reflect on the fact that our economy generated a 2.0% growth rate from 2011 through 2013 and juxtapose that against the fact that as I highlighted one year ago this very week that our economy grew at a pathetic 1.8% growth rate from 2002 until 2012.

A 2% growth rate is now so deeply embedded in our economy and significant structural headwinds persist (deficit, entitlement programs, inefficient tax system, exploding student debts, unfunded pensions, dysfunctional government, cronyism and corruption) that the future of the American dream for so many in our nation is regrettably slipping further and further away.

That is how we are really doing.

Navigate accordingly.

Larry Doyle

Please order a hard copy or Kindle version of my book, In Bed with Wall Street: The Conspiracy Crippling Our Global Economy.

For those reading this via syndicated outlet or by e-mail or another delivery, please visit the blog to comment on this piece of ‘sense on cents.’

Please subscribe to all my work via e-mail.

 

Alan “Ace” Greenberg, Rest In Peace

In early 1990 after 7 fabulous years learning the ins and outs of Wall Street while working at The First Boston Corporation, I departed that venerable firm for the rough around the edges ways of Wall Street that defined Bear Stearns. I had been cautioned by some not to make that move. I am glad that I disregarded that advice.

The relationships and business acumen I gained during my 7 years (1990-1997) at “the Bear” made all the difference in the world during my days in those large Wall Street banks.

As with most organizations, the tone and culture that emanates throughout the company is set at the top. In 1990, Bear Stearns was led by Wall Street legend Alan “Ace” Greenberg. Last Friday I felt a real sadness when I learned of his passing. While I have little regard let alone respect for most of the senior level management on Wall Street, Ace Greenberg was different. I held him in the highest regard and had untold respect for him. Why so? Let me count the ways.

Ace was a winner. He cared. He was ultra-competitive but knew that rules were not meant to be broken.

He was a bridge back to the days of Wall Street partnerships when one’s word actually meant something. While many of Wall Street’s most senior executives would stroll or saunter into their offices that were typically larger than most Manhattan apartments, Ace would spend the bulk of his day firmly entrenched at his desk and meaningfully accessible right there on the trading floor.

He was renowned for writing regular memos that went throughout the firm under his pen name of Haimchinkel Malintz Anaynikal. They were absolutely priceless and filled with a simple but precious wisdom that often got lost on Wall Street amidst the sea of egos and sociopaths that ran large parts of the industry.

His writing was collected into a short book entitled Memos from the Chairman.

His direction that paper clips and elastic bands should never be purchased by anybody within the firm because more than enough of these items could be found and saved from the incoming mail went straight to instilling a real discipline around managing expenses. I loved it.

He also emphasized that any calls or messages should be returned the same day. Very simply, Ace Greenberg took a very human approach in dealing with people. From the shoeshine guy to the executives running the firm, everybody was treated with fairness and respect. How refreshing.

In terms of whom he wanted to entice to come work at the Bear, he often stated he much preferred to attract individuals with a PSD than an MBA. A PSD? Yes, that being the designation for individuals who were “poor”, “smart”, and with a “deep desire to truly get ahead.” I loved it even more. Ace was my kind of guy.

Other recollections I have of Ace include his emphasis on a “trust but verify” system of risk management.

Outside of Wall Street, Ace was legendary for his acumen as a bridge player, a magician, and a true philanthropist. Ace stepped aside from his role as CEO of the firm in the mid-90s. Although every firm goes through a change during a transition, I never thought the company was the same after that. Many believe that the firm lost the humility and discipline embodied by Ace to such a degree that it led to the ultimate demise of the company in 2008.

A few years after Ace was no longer CEO, I departed Bear Stearns. I made a point of stopping by his desk and thanking him. Ever the gentleman, he took the time to inquire where I was going and why I was leaving the firm. We had a brief but meaningful chat after which he sincerely wished me all the best in my future endeavors.

Ace Greenberg was a good man. Wall Street could use more real men like him.

Rest in peace, Ace!!

Larry Doyle

Please order a hard copy or Kindle version of my book, In Bed with Wall Street: The Conspiracy Crippling Our Global Economy.

For those reading this via syndicated outlet or by e-mail or another delivery, please visit the blog to comment on this piece of ‘sense on cents.’

Please subscribe to all my work via e-mail.

 

What’s Going On at The ‘Deutsche Bank Haus’? Video

I am hard pressed to little more than chuckle at the recently released report by the New York Federal Reserve concerning the regulatory failures at Deutsche Bank. Why so amused?

Well, the Financial Times informs us the regulators at the NY Fed are so ‘steamed’ now due to “Deutsche’s perceived failure to act on similar problems raised by regulators since 2002.” Yes, that is not a misprint. 2002. What does that tell us?

I mean not unlike a bunch of frat boys having their way with an administration that is little more than comical and totally ineffective in maintaining order on campus, is it any real surprise that the crowd at the “Deutsche Haus” has little meaningful oversight of its own operations when its chief regulators at the New York Fed are either asleep and/or complicit in facilitating the party and mayhem?

In all seriousness, I view this current indictment of Deutsche Bank to be even more an indictment of the New York Fed specifically and the regulatory system at large.

But let’s keep it a little light and add a little bit of humor to the mix. To seriously critique DB now in 2014 when they have not been held to proper account for ‘taking liberties’ since 2002 if not before evokes comparisons with this 3-minute all-time classic scene:

Larry Doyle

Please order a hard copy or Kindle version of my book, In Bed with Wall Street: The Conspiracy Crippling Our Global Economy.

For those reading this via syndicated outlet or by e-mail or another delivery, please visit the blog to comment on this piece of ‘sense on cents.’

Please subscribe to all my work via e-mail.

 

Book Talk: In Bed with Wall Street at New York Public Library, July 31 at 6pm

In late April I had the good fortune to speak to a packed house about my book In Bed with Wall Street at the Boston Public Library, the third largest library — and one of the oldest — in our nation. In early June I was pleased to regale a filled room at the Library of Congress, the largest library in the world, about the exploits and escapades of those ‘in bed with Wall Street.’

Next week I complete the trifecta of the greatest libraries in the land when I talk about my book at the New York Public Library. Details of the talk are as follows:

Thursday July 31 at 6pm

New York Public Library: Science, Industry, and Business Branch

188 Madison Avenue (at 34th Street)

I am pleased that there have been some selected recent initiatives and statements made that address topics I highlight in the book. That said, the culture of regulatory capture, what some might define as ‘legal corruption’, and illegal corruption as well remains rife with a host of ugly and unsavory activities that have little to do with promoting and protecting the public interest. I welcome bringing real transparency to an incestuous Wall Street-Washington culture that badly needs it.

I hope those in and around New York City next Thursday evening can join me for this talk. Bring a friend or a colleague and rest assured I will not be bashful in pulling back the blanket, naming names, and a whole lot more.

Larry Doyle

Please order a hard copy or Kindle version of my book, In Bed with Wall Street: The Conspiracy Crippling Our Global Economy.

For those reading this via syndicated outlet or by e-mail or another delivery, please visit the blog to comment on this piece of ‘sense on cents.’

Please subscribe to all my work via e-mail.

Lt. Colonel Elton Johnson ‘Strongly Recommends’ In Bed with Wall Street

I am honored and humbled to read a message that was recently widely disseminated to FINRA member firms. The full body of the e-mail is an endorsement by Lieutenant Colonel Elton Johnson Jr. of Karen Fischer, a candidate for a position on the FINRA Board of Governors. Johnson prefaces his endorsement of Ms. Fischer by writing:

My name is Elton Johnson, Jr. I am an Iraq-Afghanistan war vet having served two tours in Iraq and one tour in Afghanistan and a small broker-dealer owner who took FINRA to task to provide more meaningful transparency.

Much of my story is prominently detailed in the book “In Bed With Wall Street” written by Larry Doyle which I would strongly recommend to EVERY FINRA member (Mr. Doyle was introduced to me by Karen Fischer).

I am sure that many of you will remember that in 2010, with overwhelming membership support, I presented to the Board, seven (7) Initiatives calling for Truth, Transparency, and Accountability. ALL of these proxy proposals passed with overwhelming support from the membership.  Unfortunately, the FINRA Board ignored the mandate of its members and did not grant even one of the reforms as proposed.

I am truly grateful to receive such a ringing endorsement of my book by one who is literally and figuratively ‘in the trenches.’ Dare I say, if I were in a foxhole I would want to be right next to Lt. Colonel Elton Johnson.

I thank him and all those who serve and protect our nation. Many in Washington, on Wall Street, and especially in the leadership positions of our respective financial regulators would do very well to embrace the virtues espoused by the lieutenant colonel.

I salute him.

Navigate accordingly.

Larry Doyle

Please order a hard copy or Kindle version of my book, In Bed with Wall Street: The Conspiracy Crippling Our Global Economy.

For those reading this via syndicated outlet or by e-mail or another delivery, please visit the blog to comment on this piece of ‘sense on cents.’

Please subscribe to all my work via e-mail.

SEC Whistleblower Program: Risks vs Rewards

If you became aware of unethical and likely illegal practices at your company, would you consider ‘blowing the whistle?’ This question is a daunting proposition filled with very real risks that should be measured against potential rewards.

Given the risks and unpleasant real life experiences of many whistleblowers on Wall Street, I firmly believe and recommended in my book that Congress should establish a privately staffed Office of Whistleblower Protection. Some may think that is overreach. I don’t. Others in much greater proximity to the ‘whistles’ would seem to share my view that blowing the whistle is a high risk proposition deserving of increased protection.

Let’s navigate. 

The SEC would like to tout the fact that for both 2012 and 2013 more than three thousand tips were received under its Whistleblower Program established as a result of Dodd-Frank. Yet a full 4 years since the passage of that legislation and 3 years since the launch of this program, 8 awards have been made and, in my opinion, only one of very real substance (a $14 million award made). Would you consider that a robust record? Where’s the beef?

We had been led to believe in a June 2013 Forbes review that despite the paucity of awards to that point that the “Larger Ones Are Coming.”  In hindsight, Forbes and the SEC might be gently chided for a lack of proper grammatical context in that review as the title should have read the “Larger One Is Coming.”

So back to my original question. Would you blow the whistle?

If you are considering doing so, I strongly encourage you to read chapter 9 in my book which details how selected high profile whistleblowers in and around Wall Street and Washington were ignored, intimidated, and/or ultimately fired as they tried to do the right thing. Those very real risks would seem to remain prevalent as evidenced by a release put out just yesterday by a coalition led the Government Accountability Project and the law firm of Labaton Sucharow:

Coalition Petitions SEC to Ban Corporate Tactics Used to Silence Whistleblowers

(Washington, DC) On the fourth anniversary of the Wall Street Reform and Consumer Protection Act, better known as Dodd-Frank, Labaton Sucharow LLP, the Government Accountability Project (GAP) and a growing coalition, representing more than 250 organizations and nearly two million citizens, announce they have submitted petitions with the Securities and Exchange Commission (SEC) demanding a strengthened Whistleblower Program.

The SEC Whistleblower Program offers eligible whistleblowers the ability to report anonymously, robust employment protections and the opportunity to earn substantial monetary awards – regardless of nationality. A recent Wall Street survey, commissioned by Labaton Sucharow, found that financial services professionals were aware of unethical and illegal behavior in the workplace (23%), willing to report possible violations with the protections and incentives offered by the Program (89%) and knew about the existence of the Program (60%, up from 49% just one year earlier).

“As awareness and interest in the SEC Whistleblower Program and other similar programs has grown, they have come under stealth attack by Corporate America,” said Jordan Thomas, Chair of the Whistleblower Representation Practice at Labaton Sucharow and a former Assistant Director in the SEC’s Enforcement Division. “If the SEC doesn’t adopt appropriate counter-measures, gag orders, retaliation and other forms of legal bullying will quickly erode the potential of this powerful investor protection tool.”

The first petition (rulemaking proposed by Labaton Sucharow and GAP, summary here) addresses unscrupulous legal maneuvers employed by many companies trying to silence potential whistleblowers. Examples include: preventing employees from consulting independent legal counsel, requiring notice of external reporting, demanding waivers of any future whistleblower awards, and threatening lawsuits to enforce secrecy agreements. These and other troubling legal tactics effectively topple each of the three pillars of the SEC Whistleblower Program – anonymous reporting, employment protections and monetary awards. This petition provides companies with clear guidance regarding these problematic employment agreements. The petition also urges the SEC to issue a policy statement regarding the current scope of employment protections available to SEC whistleblowers and its intent to prosecute companies that retaliate against them.

“Virtually every corporation in America has internal policies that encourage employees to report wrongdoing and promise to protect them from retaliation for doing so,” said Tom Devine, GAP Legal Director and author of The Corporate Whistleblower’s Survival Guide. “The problem is the reality gap between what these organizations say and what they do, because they have not been held accountable. Currently, corporations have little or nothing to lose from legal bullying. The worst that can happen is they won’t get away with it. The SEC can change this.”

If the SEC can change this, then 1. why didn’t those charged with protecting the public interest foresee these risks from developing — or dare I say perpetuating — and prevent them in the first place? 2. what are they doing about these risks now?

Lack of strong, meaningful action on this front by the SEC and Congress as well strikes me as meaning one thing: the commission and our pols remain justifiably accused of lying ‘in bed with Wall Street.’

Navigate accordingly.

Larry Doyle

Please order a hard copy or Kindle version of my book, In Bed with Wall Street: The Conspiracy Crippling Our Global Economy.

For those reading this via syndicated outlet or by e-mail or another delivery, please visit the blog to comment on this piece of ‘sense on cents.’

Please subscribe to all my work via e-mail.

 

Russian Hacking of Nasdaq: Further Color

Global risks on many fronts remain exceptionally elevated.

From the Ukraine to a number of hot spots in the Middle East, to the South China Sea, to our southern border, global risk is rampant. Each of these situations entails real human suffering and generates strong reactions and appropriate empathy.

Yet in the midst of each of these stories, there was another story that broke last week that deserves far greater attention than it has received in terms of our national security. I refer specifically to a story released by Bloomberg Businessweek entitled How Russian Hackers Stole The Nasdaq:

In October 2010, a Federal Bureau of Investigation system monitoring U.S. Internet traffic picked up an alert.

The signal was coming from Nasdaq. It looked like malware had snuck into the company’s central servers. There were indications that the intruder was not a kid somewhere, but the intelligence agency of another country. More troubling still: When the U.S. experts got a better look at the malware, they realized it was attack code, designed to cause damage.

This story would seem to provide sufficiently meaningful background material for a James Bond thriller. I strongly encourage readers to review it in its entirety. When one nation, in this case Russia, is found to have infiltrated the inner systems of one of our major equity exchanges, we should all be justifiably concerned.

Regular readers with sharp memories may recall that I had referenced a situation such as this a year ago. Let’s backtrack and revisit my commentary, Sex, Lies, Stupidity, Oh My: SEC Whistleblower David Weber Vindicated, Receives Huge $ettlement, in which a release to which I linked offered the following:

The September 17, 2012 report also found that Weber did not mischaracterize evidence when he discussed a matter of potential “national security” and “possible espionage” by possible “foreign nationals” related to a case Weber was investigating that “involved unencrypted computer hard drives that contained sensitive stock exchange information.”

How was Weber treated for bringing forth such critically important and sensitive information on a matter of national security? The SEC under then chair Mary Schapiro fired Weber. As the prior link highlights, Weber fought for justice, was subsequently vindicated, and received a significant settlement. All of this goes to the question as to the manner in which the SEC is run.

1. Why would the SEC fire an individual who brings forth critically important evidence of such a sensitive nature?

2. When a whistleblower such as Weber gets terminated — despite being ultimately vindicated — what message does that send to others at the SEC and elsewhere who might think about blowing the whistle?

3. If Russia did, in fact, penetrate the computer system of the Nasdaq, how do we know that they have not done the same elsewhere?

Indeed, the global landscape is filled with risks.

One would have hoped that those here at home who have tried to do the right thing in terms of bringing forth information that impacts the lives of so many would be embraced rather than intimidated and/or fired. Regrettably, Uncle Sam’s treatment of so many whistleblowers during this administration has shown that we face real risks from within just as we do from beyond our borders as well.

Navigate accordingly.

Larry Doyle

Please order a hard copy or Kindle version of my book, In Bed with Wall Street: The Conspiracy Crippling Our Global Economy.

For those reading this via syndicated outlet or by e-mail or another delivery, please visit the blog to comment on this piece of ‘sense on cents.’

Please subscribe to all my work via e-mail.

DOJ/FBI Pour Hot Acid in America’s Wall St. Wound . . . . . WOW, JUST WOW

If the American public thought that it had borne all the excruciating pain of every insult and injury that Wall Street and Washington could deliver . . . think again.

In what has to be a new low in terms of kicking the hard working, God-fearing, taxpaying investors of this land in the proverbial balls, check this WSJ story out about the motivations of the Department of Justice and Federal Bureau of Investigation in meting out large fines on Wall Street (Caution: prior to reading this, I recommend you remove any projectiles or sharp objects from your vicinity):

In extracting multibillion-dollar fines from Citigroup Inc. and other big banks, prosecutors say they are trying to deter future corporate wrongdoing by making shareholders angry enough to demand changes.

It is a significant shift in tone for the Justice Department and Federal Bureau of Investigation, which have argued for years that sending people to prison is the best way to prevent white-collar crime.

Are you f@*%$! kidding me?

With this release, Eric Holder and James Comey have taken the definition of chutzpah to a whole new level. Rather than upholding their mandate to truly protect the public interest, these lapdogs roll over — lick their own balls — and effectively admit that they are punishing the shareholders of the Wall Street banks rather than holding the senior Wall Street management to account.

How does that work when the boards of the Wall Street banks are chock full of cronies? It doesn’t work, never has, and never will. Yet that pile of dog$&*% is fed to the American public as a substitute for real justice. WOW, JUST WOW!! Talk about hot acid in a Wall Street inflicted wound. 

The DOJ and FBI could have left this story and line of reasoning untouched in the hope that the very slow passage of time might have gently cooled America’s outrage with Wall Street and Washington. But they didn’t. This story only stokes the fire and as well it should.

I believe strongly that most who read this commentary will look at Eric Holder and the DOJ, James Comey and the FBI, and yes President Barack Obama as well and say that they not only failed to hold Wall Street accountable but in doing so they were truly derelict in their duty. The line of reasoning within this statement confirms that reality because they could not possibly be this stupid to think otherwise. Or could they?

Those navigating the economic landscape around these parts would simply and justifiably say that Holder, Comey, Obama and so many more within their realm are In Bed with Wall Street.

I concur. 

The power of the pen may be mightier than the sword but it is hard to downplay how incensed I am by reading this pathetic statement put forth by departments that are supposed to stand for “liberty and justice for all.”

NOT!! Justice misdirected is justice denied. 

Our nation regressed this evening.

Navigate accordingly.

Larry Doyle

Please order a hard copy or Kindle version of my book, In Bed with Wall Street: The Conspiracy Crippling Our Global Economy.

For those reading this via syndicated outlet or by e-mail or another delivery, please visit the blog to comment on this piece of ‘sense on cents.’

Please subscribe to all my work via e-mail.

AEI: “What Works in Helping the Poor?”

Is America on the right track?

Overwhelmingly most Americans feel the nation is not headed in the right direction. Consistently over the last 4 years, 2 out of every 3 American voters have expressed their belief that the nation is headed in the wrong direction. Only 1 in 4 American voters believe the nation is headed in the right direction.

In my opinion, what is the critical issue that will define our future? The fact that we live in a nation that is increasingly divided in terms of incomes and opportunities. Both political parties would like to have us believe that they have the right answers to addressing these issues. Really? Count me as not impressed.

While we hear a whole lot of redistribution rhetoric on one side of the aisle, the other seems to talk mostly about simply lowering taxes and regulations. Meanwhile more and more Americans struggle to make ends meet.

What to do?

Take a listen to this 12-minute clip recently released by the American Enterprise Institute that puts forth four basic principles addressing work, welfare, family, and the economy. I do not know about you but this message from Robert Doar, who has meaningful experience in dealing with these issues, strikes me as employing a whole lot of ‘sense on cents.’

What do you think?

Larry Doyle

Please order a hard copy or Kindle version of my book, In Bed with Wall Street: The Conspiracy Crippling Our Global Economy.

For those reading this via syndicated outlet or by e-mail or another delivery, please visit the blog to view this video clip and to comment on this piece of ‘sense on cents.’

Please subscribe to all my work via e-mail.

RE2PECT for The Game

Today I take a break from our normal navigation of the economic landscape to reflect and pay re2pect. This evening the MLB All-Star game will be played in Minneapolis. 

Growing up as a sports nut in Boston in the late ’60s and ’70s, one of my favorite days and events of the summer was baseball’s Midsummer Classic. I distinctly recall watching the greats of the game including Al Kaline, Roberto Clemente, Hank Aaron, our own Carl Yastrzemski, and so many more. I recall as if it were yesterday hoping that whomever represented our Red Sox would have a great game.

While the individual All-Stars and their talents were superb, ultimately the game itself was the real attraction. Playing the game the right way was the thing to be truly admired. What was the virtue on display that seems to have passed as the years have gone by? Respect.

An honest assessment of what transpired within Major League Baseball during the steroid-crazed era of the last few decades would very likely implicate the owners and others charged with maintaining the honor and integrity of the game. Against that backdrop, thankfully we can look to one individual who has certainly played the game the right way. Derek Jeter may play for what Red Sox fans think of as the hated New York Yankees but he is to be held in the highest regard as the model of consistency, discipline, integrity, and re2pect. These virtues are regrettably not seen often enough along many parts of our economic landscape.

This less than 2-minute video clip pays Mr. Jeter the re2pect that he has paid the game of baseball during his illustrious career. I too tip my cap to him.

Larry Doyle

Please order a hard copy or Kindle version of my book, In Bed with Wall Street: The Conspiracy Crippling Our Global Economy.

For those reading this via syndicated outlet or by e-mail or another delivery, please visit the blog to comment on this piece of ‘sense on cents.’

Please subscribe to all my work via e-mail.