Lawrence W. Doyle

Cutting a credit rating is significantly different that placing it on ‘watch’ or ‘under review’. Most readers are likely fully aware that Standard and Poor’s and Moody’s have sent out serious warning signals about the potential downgrade of the United States AAA credit rating. That said, another SEC officially recognized ratings entity has gone one step further and actually lowered Uncle Sam’s standing by one notch. What firm is so bold and brazen to send this volley across Capitol Hill and down Pennsylvania Avenue? Egan-Jones. Unlike the supposed brand name rating agencies which did little to help ordinary investors going into our economic crisis, Egan-Jones’ business model differs markedly from the industry incestuous nature of its counterparts. The resulting lack of inherent conflict allows Egan-Jones to speak freely and boldly. What a novel concept. What does Egan-Jones have to say about Uncle Sam?  Let’s review a commentary in this morning’s Financial Times which highlights, Debt Fears Lead to U.S. Downgrade, Egan-Jones has become the first US rating agency...

For those who missed Meet the Press yesterday, please allow me to share a portion of the interview NBC’s David Gregory had with Treasury Secretary Tim Geithner. Please allow me to interject my ‘sense on cents’ analysis as well. SEC’Y GEITHNER:  We still have millions and millions of Americans out of work, and the most important thing we can do is to make sure we’re taking steps to get people back to work as quickly as we can. MR. GREGORY:  Well, let me ask you this.  The president was asked in his Twitter town hall about the economy and whether mistakes were made.  And I want to share a portion of what he said. PRES. OBAMA:  So I think people may not have been prepared for how long this was going to take and why we were going to have to make some very difficult decisions and choices.  And, and I take responsibility for that because, you know, setting people’s expectations is...

It is a well known fact that an increasing percentage of daily trading volume in the equity markets is driven by high frequency traders. Whether you think that is a good or bad development is currently irrelevant. It is a reality. That reality has clearly changed the nature of investing and assessing the markets. How does one invest with a long term horizon when so much of the market is driven by short term traders? Very carefully. Long term investing requires a solid understanding of fundamental analysis.  In the midst of that endeavor, though, investors might want to have an appreciation for technical analysis, which can be utilized across an array of time periods but is very often applied for shorter time periods. Students of technical analysis will gain an appreciation for overbought and oversold conditions, along with a grasp of market psychology. Have I lost you yet? I hope not. Let’s get a little more specific and look at an individual poll of active investors...

What did the Lord say to Noah? The same thing that Bank of America CEO Brian Moynihan might now be saying to his shareholders. That is, ‘how long can you tread water?’ Bank of America’s stock is down approximately 25% on the year and close to 35% over the last twelve months. While it has doubled from the Armageddon lows seen in 2008, the stock has fully retraced any moves higher since early 2009.   (The graph of Bank of America below is sourced from Market Watch and covers the last three years). What gives? Will Bank of America need to raise more capital? Will it need another lifeline from Uncle Sam? While BofA is heavily involved in virtually every segment of consumer, commercial, and investment banking in the world today, at its core it is a truly a consumer banking franchise. As such, its stock price is a reflection of its consumer banking operations and in turn the health of the American consumer....

  This past Friday’s unemployment report was beyond disappointing. With non-farm payrolls increasing by a token 54, 000 and the prior month’s report indicating a downward revision of 12, 000 our ‘walking pneumonia’ economy continues to languish under the weight of excessive debts and grave uncertainties. What is an administration to do when faced with such a challenge? Spin, baby, spin. Where do I witness this spin cycle working in overdrive? The Obama administration’s touting of success in saving our automotive industry. There is little doubt that the Obama team will be ‘driving’ this ‘saving’ of the automotive industry hard as part of his 2012 reelection platform.  Obama is entitled to deliver whatever message he may care to gain reelection but the American public is equally entitled to know the lengths and costs to which the administration went on this front. Trampling of capitalism and the Constitution, perhaps? Twisting of arms like never before? Playing hardball politics with basic market principles in an unprecedented...

While many clubs in our nation continue to suffer from declining membership rolls, there is one “club” experiencing explosive growth. What makes the entrance into this club so special is the ability of the members to curry favor with those controlling the purse strings. Smell a little funny? Just a little? See the real entrance into this club is effectively a circuitous system of ‘payoffs’ and ‘kickbacks’ with the ultimate costs borne by average American citizens. What club is this?  Sense on Cents designates this California’s $100,000 Club and we get to take a harder look at the growth of this exclusive enclave thanks to the Sacramento Bee, which highlights Six-Figure Pensions Growing Fast, While California’s $100,000 Club gains the greatest degree of attention, rest assured that there are similar clubs and organizations in each and every state in our union. What do you think about these clubs? Me thinks that my children and your children are being stuck with bills and burdens which...

What a weekend. I would like to comment on two specific situations. 1. Dominique Staruss-Kahn Just when you think the world could not suffer any further ‘assaults’ from global financial executives on our sense of decency and the virtuous pursuit of truth, transparency, and integrity, enter IMF chief Dominique Strauss-Kahn. While Kahn obviously is innocent until proven guilty and is entitled to due process, his arrest this weekend in New York City on charges of sexual assault upon a hotel maid evinces many reactions including: 1. He did not have other things on his mind worrying about an imminent Greek default and/or restructuring of Greece’s financial debacle? 2. Do you think this is the first time he has assaulted?  3. Do you think that knowledge of these types of behaviors if they have occurred previously could lead to chances that Kahn and ultimately the IMF could effectively be extorted? 4. Here’s hoping our criminal justice system operates with a blind eye and that New York...

I chuckle as I write the title for this commentary for the very simple reason that it is a line heard so often on the sales and trading desks on Wall Street. We can get a sample of “what the smart money is thinking and doing” from a very recent Bloomberg Poll. Be mindful that those polled represent a global random sampling of 1,263 Bloomberg subscribers. Would you like to know what they think of the following? 1. Which national markets will offer investors the BEST and WORST opportunities over the next year? 2. What asset class will offer the BEST and WORST RETURNS over the next year?  3. What do those polled think of their regional economy, the U.S. economy, and the global economy? 4. Where will the U.S. dollar stand relative to the Euro three months from now? 5. How do these global investors intend on shifting their exposures across asset classes over the next six months? (I find this question to be particular...

Call me old fashioned but the idea that those engaged in abusive, and very likely fraudulent, business practices are allowed to negotiate a settlement strikes me as un-American. That said, the world of unintended consequences in our Uncle Sam and Wall Street dominated economic system brings us just such an un-American approach in terms of addressing our current mortgage mess. Negotiate? Settlement? Growing up in Boston in a family full of lawyers, I was under the impression that fraud and abuse likely got you 5 to 7 years in a medium security facility and maybe you got out in 3 to 4 with good behavior. Perhaps that form of justice still applies to you and me but for the large monied interests who run this country, we’re talking negotiations and settlement. Wow!! Little wonder why the rage in our nation directed at the Wall Street-Washington incest continues to burn so strongly. Let’s navigate. My commentary of earlier this week, Did Wall Street Violate...

What does our economic future hold? Great question, right? Is our economy truly rebounding as much as our equity markets may portend or are we riding high predominantly due to government stimulus similar to an economic anabolic steroid? Is our future as bleak as the numerous and sundry doomsayers would proclaim? Does it appear as if our economy has a split personality or is operating in two different realms? Do you often wonder what others—especially those in Washington—may be seeing if the economic landscape in your backyard remains very challenging? I continue to believe our overall economy is and will continue to operate with a ‘walking pneumonia’ type condition. The massive debt burdens at all levels of our economy continue to serve as a drag and inhibit any sort of truly robust rebound. Let’s navigate and take the pulse of Rick Davis of Consumer Metrics Institute which captures real time discretionary online consumer activity.  Rick and his team recently put forth a fabulous...