Certainly not, although those engaged in the behaviors may appreciate the benefits that accrue to them without wanting them brought to light.

On that  note, the incestuous dynamic that defines the Wall Street-Washington-Regulatory menage-a-trois continues to thrive. You don’t have to take my word for it. Let’s listen to what Simon Johnson, former chief economist of the IMF, professor at MIT Sloan, and a senior fellow at the Peterson Institute for International Economics has to say on this topic. 

Johnson writes compelling commentary today at Project Syndicate,

The recent governance controversy at JPMorgan Chase has masked a much larger issue. Regardless of Jamie Dimon’s victory in retaining his dual role as CEO and chairman of the board, the more important failure on display was that of the board of directors itself – a problem that affects almost all of the world’s megabanks.

This is completely obvious at JPMorgan Chase. The report of the recent bipartisan investigation, led by US Senators Carl Levin and John McCain, into the infamous “London Whale” trades provides just one example. There is also the litany of complaints and legal cases now surrounding the firm. It is difficult to see JPMorgan Chase escaping its past anytime soon.

But the problem is much broader: Not a single global megabank has a well-functioning board. Their members kowtow to CEOs, do not examine management decisions closely, and, with very few exceptions, rubber-stamp compensation requests.

Big banks’ boards are supine for three main reasons. First, and most important, there is no market for control over the biggest banks. One cannot build up a significant shareholding and use it to put pressure on boards – let alone pursue a hostile takeover. The London Whale is a case in point. The pressure brought to bear on JPMorgan Chase was completely inconsequential – nothing significant will change.

This is primarily because regulators – despite what they may claim – effectively protect megabanks from market discipline. “Systemic importance” has become an excuse for maintaining impenetrable entry barriers (yet another reason why executives want their firms to be regarded as too big to fail).

Second, most board members lack sufficient relevant expertise. Who on the current board of JPMorgan or Citigroup has real experience running a giant complex trading operation (which is what will make or break these companies over the next decade)? Who among them understands macroeconomic risks not in terms of the platitudes of the prevailing consensus, but as the tail risks – the low-probability, high-impact events – that always wag the dog of financial crisis?

Unqualified board members do not ask hard questions. And, five years after the largest financial crisis in almost 80 years, one can count the number of properly qualified board members – across all megabanks – on the fingers of one hand.

As a result, megabanks’ senior managers are not pressed to remove layers of opaqueness that shield their risk-taking from effective scrutiny. This helps to keep board members in the dark – and gives them a convenient excuse for not really understanding how the business works.

Effective governance is possible under various formal arrangements. In principle, a strong outside lead director can be just as effective as an independent chairman – a fair point that has been made in recent weeks.

But which huge banking conglomerate has such a lead director today? Which board members are willing and able to stand up to CEOs? That has certainly not been the recent experience at JPMorgan Chase.

Finally, regulators, too, have been rendered docile in the face of the megabanks’ CEOs. Regulators have the power to require that boards become more powerful – or at least minimally effective. For example, they could tighten the qualifications needed to become a bank director (in the United States, for example, the requirements are not serious). Instead, regulators stand idly by while bank boards remain self-perpetuating clubs, with membership regarded as little more than so much social plumage.

The regulators acquiesce because, simply put, they are afraid. Mostly, they are afraid that being tough on bank governance will somehow disrupt the flow of credit. It is a silly and baseless fear, but that is how modern regulators think and act – in a state of constant, irrational anxiety.

The banks in question are so large and so central to the functioning of economies that each of them is too big to regulate. Whenever small groups of individuals acquire that much power relative to the state and the rest of us, there is big trouble ahead. Power corrupts, and financial power corrupts the financial system.

The biggest banks were badly run in the years leading up to the crisis of 2008 – exhibiting a toxic mixture of hubris, incompetence, and excessive leverage – and their governance problems today are worse than they were in 2005 or 2007. The 2008 crisis was followed by a long, hard recession; we should not expect a different scenario now.

How might we define this situation? In Bed with Wall Street.

Navigate accordingly.

Larry Doyle

Isn’t  it time or overtime to subscribe to all my work via e-mail, an RSS feed, on Twitter or Facebook.

I have no business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

Little surprise that Jamie Dimon will remain as both CEO and chairman of JP Morgan.

I mean was there really any doubt? There wasn’t.

While shareholder groups might pretend that they can exert influence over the management of large corporations and especially banks, there is little of meaningful resemblance to a democratic process in proxy voting.

Disgruntled individual shareholders can try to rally the troops and force change but with an institution such as JP Morgan, who really carries the weight?

The largest institutional shareholders. Who are they?

Top Institutional Holders
Vanguard Group, Inc.
State Street Corporation
BlackRock Institutional Trust Company, N.A.
Wellington Management Company, LLP
FMR, LLC (Fidelity)
Price (T.Rowe) Associates Inc
Northern Trust Corporation
Bank of New York Mellon Corporation
Capital World Investors
Massachusetts Financial Services Co.

These ten institutions collectively own approximately 25% of JP Morgan’s outstanding shares.

Do you think Jamie may have reached out to the respective heads of these institutions to tell them how much he wanted to remain in complete control of JPM? You think? Of course he did. Do you think these respective heads may have voiced some of their wants and needs to Jamie? Come on. Of course. You scratch my back and I’ll scratch yours. That is how the game is played.

What about the following issues, though?

London whale: tempest in a teapot, right?

Money laundering in the midst of the Madoff operations at JPM: why bother bringing that up?

Manipulation of the electricity markets in selected states: should we simply disregard as many are wont to do?

Blythe Masters lying to regulators: leave the women and children alone, perhaps?

Rigging Libor: are we still talking about this issue?

All yesterday’s news, right? Perhaps in a world of captured regulators and a banking oligopoly these stories may be easily dismissed but they do little to inspire any sort of trust or confidence on behalf of individual investors and consumers. But the little people only get a token voice when it comes to addressing who really runs the show inside our major financial institutions.

In the incestuous dynamic of Wall Street and Washington, King Jamie and his court really run the world and we just get to live in it.

Navigate accordingly.

Larry Doyle

Isn’t  it time or overtime to subscribe to all my work via e-mail, an RSS feed, on Twitter or Facebook.

I have no business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

I cannot begin to imagine the pain and suffering of families who have lost loved ones, especially young innocent children. Pray for them and let our prayers bring these people peace. Please also pray that lives may be saved in the ongoing search and rescue mission. Pray for those who are still in storm shelters that they may be found and saved. Please also pray for those who have been injured that they may recover fully. Pray that subsequent storms will spare lives.

The world will go on but for those in Moore and in close proximity life is forever changed. We do not need devastation such as this storm captured by these storm chasers to remind us of just how fleeting life is.

Pray for Moore and pray for peace.

LD

(for those receiving this commentary by e-mail and who would like to view the video clip please visit the site at www.senseoncents.com)

While the fundamentals of our underlying economy bump along with continued structural headwinds and fiscal support from Uncle Sam remaining anemic, the Federal Reserve’s QE-infinity remains the underlying cornerstone supporting our markets.

With equities making new highs and high yield bonds trading at stratospheric levels, recent pronouncements from Fed officials strike me as looking to accomplish two goals:

1. ease the air out of the bond bubble, especially the most speculative sectors of the market, i.e. high yield corporate bonds, while simultaneously,

2. maintaining a base of support to the equity market.

While selected Fed governors have long called for an end to the QE “maddening manipulation of markets”, I strongly believe Fed chair Bernanke will be slow to ease his foot off that pedal and if he were to do so I think he would indicate he is not looking to apply the brakes but perhaps merely slow the rate of acceleration.

But let’s posture if the Fed were to actually not only decelerate but actually apply the brakes to its QE. What would be the normalized rate on the 10 year Treasury in an environment in which the “quoted” rate of inflation is running between 1- 1.5%? Even if the 10 year were perceived to be “fully valued”, I believe the 10 year would be trading at best at a rate of 3% rather than the current rate of 1.93%.

A 100+ basis point selloff in bonds would be painful to those who own these instruments but given that markets tend to overshoot, the market decline would not likely be orderly. For that reason, I do not believe the Fed is likely to make any sort of of pronouncement of an actual end to QE. I think Bernanke and his likely dovish successor Janet Yellen will try to “talk” the market through this so as to try to ease the air out of what they know is a bond bubble.

On the flip side of the coin, that being the equity market, I see similar signals by the Fed to “talk” the market up and legitimize the current levels. How so? Bernanke just the other day delivered a commencement address promoting the benefits of innovation at Bard College. Specifically he stated,

. . . that IT and biotechnology have tremendous scope to improve healthcare – which absorbs a considerable amount of U.S. household income and where costs are projected to rise – as well as the potential for the development of cleaner energy.

One might wonder if a White House official helped him with his remarks?

All this said, what is going on in the real global economy? A continued sluggishness reflected by a decline in the price of most commodities. Even in the face of global liquidity printing provided by the Fed, ECB, and now the Bank of Japan, a basket of commodities reflected by the UBS Commodity Index is down over 20% in the last two years. What does that tell us? The underlying global economy continues to struggle with deflationary pressures. What else does it tell us and what do many in the markets share with me? Many market segments remain heavily manipulated by central banks and those doing their bidding for them.

What do readers think?

Navigate accordingly.

Larry Doyle

Isn’t  it time or overtime to subscribe to all my work via e-mail, an RSS feed, on Twitter or Facebook.

I have no business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

In Congressional testimony this morning, the outgoing acting commissioner Steven Miller has done his best to parry — some would say stonewall — Republican committee members. The simple fact is America learned what it needed to from this hearing in the opening testimony provided by the Inspector General J. Russell George.

Let’s watch, listen, and learn:

With this knowledge now confirmed, the follow up questions that must be answered are:

1. Who directed the activity?
2. Who at Treasury was made aware of it?
3. Was knowledge of this activity and information gleaned by the IRS shared with others? If so, who and when?

UPDATE: we learned later in the hearing of the following as highlighted by The New York Times:

The Treasury Department’s inspector general told senior Treasury officials in June 2012 he was auditing the Internal Revenue Service’s screening of politically active organizations seeking tax exemptions, disclosing for the first time on Friday that Obama administration officials were aware of the matter during the presidential campaign year.

How might we gain the necessary transparency and the ultimate truth?

I feel strongly there is a need to appoint an independent counsel with the power of subpoena to find and review any and all necessary information. First things first. Take out all the shredders from the appropriate offices.

Those on the Democratic side of the aisle are wont to make the case that this activity within the IRS stems from the Citizens United case addressing campaign finance. I would maintain that that topic should be addressed AFTER we learn what transpired at the IRS.

Truth, transparency, and integrity continue to be virtues that take a battering in and around Washington. America continues to suffer as a result. Let’s continue to fight for our country.

Larry Doyle

Isn’t  it time or overtime to subscribe to all my work via e-mail, an RSS feed, on Twitter or Facebook.

I have no business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

As if we did not already know that the SEC has all too often failed to protect investors, let’s navigate and learn about the case of current SEC employee Kathleen Furey. From a recent complaint brought by Ms. Furey against the SEC:

The three-year ascent of Kathleen Furey to higher levels of official responsibility and pay came to an abrupt halt in 2008, shortly after she was forced to become a whistleblower. 

In August or September of 2007, Furey approached Assistant Regional Director George Stepaniuk, her level-2 supervisor, to discuss the investigation of “name redacted” which seemed to be floundering, just like many investigations of other investment companies or advisers had floundered in the past.

Wouldn’t you like to know what entity this was? I would. Could it have been Bernie Madoff’s operation? Actually a review of the amended complaint reveals that Furey did work on the Madoff case — after it had blown up and the SEC was skewered by Harry Markopolos.

Furey believed that “name redacted” had violated both the Investment Company Act of 1940, and the Investment Advisors Act of 1940. Stepaniuk responded that his group—approximately twenty lawyers in the SEC’s Division of Enforcement — “does not do IM (investment management) cases.” In essence, Stepaniuk had arrogantly admitted that he was flouting two of the four major securities acts that Congress and the Code of Federal Regulations had mandated the SEC and its staff enforce.

Wow. Talk about a bombshell allegation regarding a total abdication of duty within the SEC. If this is not a smoking hot gun of enormous proportions, I do not know what is. I would maintain that Stepaniuk’s statement, if made as Furey asserts, is a clear cut indication of corruption within the commission.

If the SEC “does not do IM cases,” and we know they bring very few cases against the major banks, the question begs what was — and still is — going on within the offices of our nation’s top financial cops?

Furey faced a dilemma: should she join in Stepaniuk’s decision to flout the law and thereby violate the oath she took when she became an SEC employee or risk angering Stepaniuk by disclosing his personal moratorium on enforcing the IAA and ICA to his supervisors, the next logical step to correct the problem.

In October 2007, Furey approached Associate Regional Director David Rosenfeld,  her level-3 supervisor, and requested a transfer out of Rosenfeld’s group.  Furey told Rosenfeld about Stepaniuk’s self-imposed moratorium on “IM cases.” Rosenfeld reacted with indifference. Consequently, Furey took her concerns about Stepaniuk’s IM moratorium a step higher—to the Regional Director of the New York Regional Office, Mark Schonfeld.

Schonfeld offered Furey two options: she could recant her statement about what Stepaniuk told her or she could inform the staff of the SEC’s Inspector General, David Kotz of her allegations. In this way, Furey was forced to become a whistleblower.

Talk about cavalier. Again, if true and as alleged by Ms. Furey, Rosenfeld and Schonfeld should be thoroughly investigated by an external official. Although, if we were to look for Mr. Schonfeld these days, we would have to track him down by going through the revolving door as Schonfeld is now working at Gibson Dunn.

One year later—before the sting of her whistleblower disclosures to Rosenfeld, Schonfeld, and IG Kotz had worn off—NYRO’s indifference to enforcing the securities acts against one prominent investment manager—Bernard Madoff—would produce the worst failure or perhaps more accurately the worst scandal in the SEC’s history.

Whether Furey’s claims of the SEC’s unwillingness to investigate alluded to the Madoff scandal, we may never know. We may also never know why Ms. Furey suffers the consequences of the derailment of what was once a promising SEC career. Why is that? The SEC is contesting  Furey’s request for the necessary info to pursue her case via a Freedom of Information Act request.

Furey remains an employee of the SEC and is fighting to be compensated at the level of which her own reviews indicates that she deserves.

If the new leadership of the SEC might like to convey a meaningful change in the manner in which it handles situations such as these, then they should release the information requested. Or are we to believe that perhaps the SEC still “does not do IM cases” and remains in bed with Wall Street and Washington instead of upholding its mandate to protect investors.

You cannot make this stuff up.

I thank the regular reader who brought this story to my attention. If you find situations such as these as troubling and disturbing as I do, I hope you will care enough to share it with your friends, family, and colleagues. In light of the most recent developments with the DOJ and the AP, whistleblowers need all the support they can get these days.

For those with an interest in reading more about this case, I welcome linking to Furey’s complaint brought against the SEC and related Exhibits:

FUREY v. SEC (click on image to access pdf document):

FUREY RELATED EXHIBITS (click on image to access pdf doc):

Related Commentary
Bloomberg’s William Cohan writes, How Bad Can It Be for SEC Whistleblowers?; May 15, 2013

Larry Doyle

Isn’t  it time or overtime to subscribe to all my work via e-mail, an RSS feed, on Twitter or Facebook.

I have no business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

The stench of the cesspool of scandalous activities in Washington is now bubbling over into the backyards of those who have previously stridently defended this administration.

The flood of filth associated with the three current bombshell stories leaves me with a number of feelings and questions that I would like to share with readers. I would welcome hearing what readers make of all these sordid situations. My thoughts include:

1. We are witnessing a serious failure of real leadership. I do not pretend to think that the other side of the aisle has the statesmen our country needs right now but does anybody believe that the administration is displaying the necessary leadership to move our country forward currently.

If the administration had a real set of balls and the courage and character needed for the office, I think we would witness the immediate announcement of 3 separate independent investigations led by people with unquestioned integrity and credibility. Grant these investigators the power of the subpoena and mandate that they leave no stone unturned in determining “THE TRUTH.”  Whom would readers nominate? Allow me to throw out the names of Judd Gregg and Evan Bayh to start. Allow these individuals “to get to the bottom” of what really happened in all three situations so that our  national interests can once again be prioritized.

2. Who is Denis McDonough? At all times but especially during times of crisis, the White House Chief of Staff is the administration’s de facto chief operating officer. Check out McDonoughs’ resume. He may have a distinguished career down the road but as of now he not only has no public presence but little meaningful experience to occupy such a lofty position. This is not good.

3. In regard to the Department of Justice’s betrayal of the Associated Press, none other than the chief executive of the Project on Government Oversight, Danielle Brian, said, “The Justice Department’s seizure of the Associated Press’ phone records is Nixonian. The American public deserves a full accounting of why and how this could happen.”

Strong words from an individual and an organization that works tirelessly to promote truth and transparency in Washington.  All too much evidence of intimidating whistleblowers has streamed out of Washington over the last few years. I am all for national security. I am also all for protecting the interests and identities of whistleblowers.

4. Add it all up and what do we get and why do I feel compelled to write this commentary?

Without strong leadership, the trust and confidence so badly needed to help our economy grow will not only be stifled but will actually decline. The “people’s business” will remain relegated to the back burner. Do you think the many families struggling to make ends meet need to see our news dominated by activities that do nothing to help put bread on the table?

The Washington soap opera will run for another season. Real life in mainstream America deserves far better.

Navigate accordingly.

Larry Doyle

Isn’t  it time or overtime to subscribe to all my work via e-mail, an RSS feed, on Twitter or Facebook.

I have no business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

Well, in reviewing a report released yesterday by the US House of Representatives Committee on Energy and Commerce, we gain a greater appreciation for just how expensive this train wreck might be.

I hope readers are not already feeling ill at ease this morning because after reading this report I can assure you that you will get sick. Let’s navigate and look more deeply at The Looming Premium Rate Shock: >>>>>>>

Affordability. It was a central premise – and promise – of the Patient Protection and Affordable Care Act (PPACA) when the law was debated in Congress throughout 2009 and signed into law on March 23, 2010. In his remarks that day, President Barack Obama stated: “This legislation will also lower costs for families and businesses . . . .” Over three years later, the White House continues to state that the PPACA will lower costs.

Then how do the wizards working at 1600 Pennsylvania Avenue explain this.

On March 14, 2013 the committee sent letters to 17 of the nation’s largest health insurance companies requesting analyses of the effect of PPACA’s (i.e. Obamacare) policies, mandates, taxes, and fees on premiums.

The materials submitted by the health insurance companies show that the PPACA will increase premiums significantly for most Americans. One company stated: “…consumers in about 90% of all states would likely face significant premium increases.” Another insurer wrote that they “expect significant increases in premiums for a large percentage of our membership depending on their current health plan product and their specific circumstances.”

How large might the increases be for those purchasing individual coverage?  (caution: get your barf bag ready!!)

The total average change due to the PPACA for new business in the individual market will be a 96 percent increase in premiums. Existing customers can expect an average increase of 73 percent.

Note that these are only the average expected changes because of the PPACA. As is shown above, new business in the individual market could see a premium increase of 413 percent when new requirements on age rating and required benefits are taken into account.

In dollars, this is a large hit to every American’s pocketbook. The average yearly cost for a new customer in the individual market grows from $1,896 to $3,708 — a $1,812 cost increase.

Another insurer provided materials showing that the average increase would be much higher for a young, healthy male. As the chart suggests, the PPACA could lead to a 180 percent premium increase.

What about for small employers, those being companies with fewer than 50 employees?

 . . .  purchasers of small group plans can expect premium increases of up to 50 percent. The insurer that produced this chart estimated that a plurality, 35 percent of  the small group market, can expect premium increases over 30 percent. An additional percent of small group purchasers can expect increases ranging from 20 percent to 30 percent.

And for large employers?

Most of the insurers contacted by the committee had not conducted an analysis on the PPACA’s effects on the large group market. One insurer that did, however, estimated a premium increase for the large group market at 20 percent to 25 percent. Another insurer provided the following chart showing estimated premium increases in the large group market ranging from 15 percent to 20 percent.

As if these increases were not enough to make you sick, the committee also informs us that new taxes and fees,

. . . could increase premiums from 2.3 percent to 2.5 percent in 2014 in the individual, small, and large group markets. This tax could increase premiums an additional 3 percent to 4 percent in future years. Other insurers, by grouping the fees and taxes together, found premium increases ranging from 4 percent to 8 percent.

What does the committee conclude?

The internal documents provided by the insurance industry confirm many of the concerns voiced over PPACA: despite promises that the law will lower costs, the PPACA will in fact cause the premiums of many Americans to spike substantially.

The broken promises are numerous, and the data reveals that many Americans, from recent college graduates to older adults, will not be able to afford the law’s higher costs.

One of the nation’s leading insurance companies that insures millions of Americans predicts premiums will nearly double for individuals getting a new plan, those keeping their insurance will see an average increase of 73 percent, and some individuals could see increases of as much as 413 percent.

These figures forecast looming financial hardships when the law takes effect on January 1, 2014.

Why is it that our economy cannot seem to gain any momentum? A variety of reasons but the grinding of the brakes related to Obamacare should not be underestimated.

Navigate accordingly.

Larry Doyle

Isn’t  it time or overtime to subscribe to all my work via e-mail, an RSS feed, on Twitter or Facebook.

I have no business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

In light of the ongoing developments with the stories centering on Benghazi and the abuse of power within the IRS, I feel compelled to offer a brief comment.

Politics is certainly a dirty business.

National security in a world filled with new risks has likely never been more challenging. That said, there comes a point in time where politics need to be set aside and the people’s business needs to be prioritized.

In the course of a brief conversation with a reporter who covers the scene in Washington, he shared with me that a since departed senior White House official shared with him that he was frustrated in his capacity. Why so?

Because “everything is political” in the current administration. He offered that prior administrations, both Democratic and Republican alike, would concentrate on how the politics played out 75-80 per cent of the time. After that, political leaders from both parties would settle down and try to get the people’s business done. Not so currently as everything is addressed in terms of how it will play politically.

In a city and an administration in which everything is political, what suffers and is often compromised?  The truth.

How does that happen? A compliant media having abdicated its responsibility to find and promote “all the truth that’s fit to print” fails to uphold that mandate.

I would like to think that I am not so naive as to think that there will not always be issues of national security in which information needs to remain privileged. But when seemingly every issue is viewed through the prism of how it will play politically, then I firmly believe America as a whole suffers.

What really happened within the Internal Revenue Service to allow selected groups to be singled out and subjected to inappropriate review? In similar fashion, what has really happened within many of our financial regulatory agencies that have failed to protect the interests of homeowners, investors, consumers,and the American taxpayer?

When the truth takes a back seat to the politics, a culture of crony abuse of power is allowed to propagate.

Sad but true, I think America is awash in this political cesspool currently.

Where are the real political leaders from both sides of the aisle and where are the leaders within the media who are willing to stand up and say . . .  ENOUGH??

Good for Marco Rubio to stand up and speak out.

Thoughts, comments, constructive criticisms encouraged and appreciated.

Larry Doyle

Isn’t  it time or overtime to subscribe to all my work via e-mail, an RSS feed, on Twitter or Facebook.

I have no business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

America is increasingly aware that banks that are too big to fail, trust, regulate, prosecute, and jail are thus — duh — TOO BIG TO EXIST!!

This basic principle espoused by anybody with even a modicum of “sense on cents” is gaining momentum in Washington given the growing bipartisan support for the Brown-Vitter Bill to address the too big to fail reality.

I personally believe the Brown-Vitter Bill should only be an initial pit stop on our way to breaking up these mega-banks that own Washington and run our country. Who recently weighed in on these topics? 

Paul Ryan (R-WI) had the following to say to his constituents in a town hall in Wisconsin:

Banks are getting really big, and they are using the value of their deposits to go do other things that are really not banking and jeopardizing the stability of the system.

Dodd-Frank goes in the wrong direction. It creates a permanent bailout fund. It deems very large, interconnected  banks as too big to fail, meaning the government will back them up if they go down. And that means these really large banks can go into the markets and get money at a much cheaper rate than your community bank.

I also believe in what we call the Volcker rule, which means if you’re going to act like a hedge fund then be a hedge fund. If you’re going to be a bank, then you have to be regulated like a bank.

Meaning separate the ability of banks to take the implied subsidy of insured deposits and leverage that. I think that was one of the mistakes that was made.

What else does he have to say? Listen to this brief 2-minute clip.

Too big to fail, trust, regulate, prosecute, and jail . . . then — duh — BREAK ‘EM UP!!

Navigate accordingly.

Larry Doyle

Isn’t  it time or overtime to subscribe to all my work via e-mail, an RSS feed, on Twitter or Facebook.

I have no business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.