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April 2010

Turning the Corner in Banking – A Wall Street Tale

Wall Street was upbeat in mid-April because the country’s four largest banks (Bank of America (BAC), JPMorganChase (JPM), Citibank (C), and Wells Fargo (WFC)) all reported what Wall Street considered “turning the corner” earnings and all the CEO’s except BAC’s Moynihan were positive on the immediate future.  The data, however, do not lead to such conclusions. Profits rose at two of the big four.  C’s profit rose to $4.43 billion …Read More

Fool’s Gold 2: Los Angeles

In a January blog, I discussed the fact that despite the conventional wisdom about the “safety” of municipal bond investments, the immediate future could see a significant number of municipal defaults.  So, it shouldn’t have come as a shock to our readers when Los Angeles’ Controller Wendy Greuel recently warned that the city’s general fund could run out of money by May 5th.  She reported that the city’s budget gap …Read More

Financial Reform – Still on the Hook

In the wake of the financial meltdown, Wall Street and those that are “Too Big To Fail” have returned to business as usual with leverage levels and risk taking on par or greater than in 2007, including proprietary trading and the resumption of abusive derivative trading relative to their capital capacity.  To date, there has not been meaningful reform. Proprietary trading occurs when firm’s traders actively trade stocks, bonds, currencies, …Read More

The Coming U.S. Debt Crunch

Much energy has recently been spent gaming Japan’s probability of future default, as their government debt has risen to nearly 200% of Gross Domestic Product  (GDP).  While this number is extraordinarily large, and portends future problems, Japan is not alone.  While the U.S. Federal debt is not at the lofty levels of Japan’s, there are huge issues.  When we look at any budget, we can look at how much cash …Read More