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Gary Townsend  

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  • Yes, The SEC Was Colluding With Banks On CDO Prosecutions [View article]
    It struck me that the SEC's prosecution of Goldman was political from the start, to resuscitate and support the administration's financial "reform", which was flagging at the time.

    After all, these CDOs were placed with institutional "sophisticated" parties, and in May 2007, despite what Toure may have believed, no one knew that September 2008 would bring financial panic.

    Without the SEC attack on GS (approved 3-2 by SEC commissioners along party lines), the 2010 financial reform may never have passed. That would have been a good thing actually had we waited another two years to pass real reform, instead of the punitive, jobs killing hash of Dodd-Frank.
    May 4, 2014. 05:59 AM | Likes Like |Link to Comment
  • Jamie Dimon Needs A Boss [View article]
    Advocates seem wedded to some aesthetic ideal that sees the division of the chairman's and president's roles, and usually assert that it's not personal, that it's not about Jaime, per se.

    But the reality is that there's a political aspect at the center of this debate, that Jaime's been too good at questioning the governing authorities, for having suggested quite correctly that the economy's poor recovery can be explained by Dodd-Frank (a jobs killer) and the over- and poor-regulation of our financial system.
    May 21, 2013. 01:02 PM | 2 Likes Like |Link to Comment
  • Bank Of America: Fortune Favors The Bold [View article]
    This author lost me in his first sentence, where he states that the SPX peaked on May 1st. It was actually April 2nd, at 1419.04. It was the DJI that peaked on May 1st, at 13,279.32.
    May 17, 2012. 03:03 PM | Likes Like |Link to Comment
  • Why New York Community Bancorp Is My Favorite Financial [View article]
    In New York, the mid-cap financial to own is Signature Bank (SBNY), truly a growth story, with great deposit funded balance sheet growth, rapidly expanding loan base, growing revenues, combined with great efficiency and credit quality. Market cap of $2.9 billion.
    May 15, 2012. 11:47 AM | Likes Like |Link to Comment
  • Annaly Capital - The Beginning Of The End [View article]
    That's a painful dividend to pay, and the $0.55 declared exceeded the $0.50 expected. If news is better than expected, it suggests to me that the stock price will rise, and sure enough, NLY is up $0.17 pre-market. How should we expect the rise in 10-year yields affect NLY's revenues?
    Mar 21, 2012. 09:18 AM | 7 Likes Like |Link to Comment
  • MF Global: One Possible Explanation Where Customers' Money Went [View article]
    I suspect that we'll find that when the eurotrades were so quickly unwound, the losses ended up about $2.4 billion, or nearly half the held to maturity repo net value, equal to the firm capital plus about 23% of the net value of the repos outstanding on October 25th.

    I doubt that we'll find that Corzine ever had possession of any of the funds, which Madoff did, of course.
    Dec 6, 2011. 10:47 AM | 1 Like Like |Link to Comment
  • Inside The Mess At MF Global [View article]
    The monetary policy context must be considered. MF was pressured by Fed policy. Bad policy begets bad business. Fed funds at zero made a 150 bps in highly rated Italian sovereign debt an attractive alternative. What could go wrong?
    Nov 24, 2011. 08:35 PM | Likes Like |Link to Comment
  • MF Global: One Possible Explanation Where Customers' Money Went [View article]
    Tim - In my opinion, the best way to understand what happened is that
    * MF looked for yield in Europe because the Fed dialed down U.S. rates to zero, while the ECB had similar short-term rates at at least 1.5%. When the Fed misprices interest rates, MF misdirected its investments and risk managment.
    * When it tried to unwind these investments rapidly, it took the unexpected loss of more than $1.2 billion, the missing client funds and also its capital.
    Nov 22, 2011. 09:27 AM | 2 Likes Like |Link to Comment
  • Dodd-Frank a Year Later: Bad Legislation Ages Poorly [View article]
    Wouldn't better legislation better improve investor confidence? Without all the unnecessary baggage in perpetuity?
    Jul 25, 2011. 10:00 AM | Likes Like |Link to Comment
  • Europe: The Sky Is Falling [View article]
    A similar debate took place in the early years of the United States, when Alexander Hamilton proposed that the federal government should assume state debts incurred during the Revolutionary War, that the rate of interest should be unilaterally reduced, and that payments of principal should be postponed.

    Virginia's Jefferson and Madison objected that as that state had already paid down half its debts, that Hamilton's proposal would assess it again, benefiting other less "provident" states; further, that it was unconstitutional; lastly, that the lowering of interest rates and postponement of principal repayment was not repayment in full. Also, there was the usual objection that speculators, who had bought state debts at steep discounts, would profit.

    As we know, Hamilton's view prevailed after he agreed that the capital city should be located in Virginia (the original land grant included land on that side of the Potomac). But the greater benefit was that the fledgling United States suddenly had access again to world capital markets. So out of penury, came prosperity.

    The Europeans have the opportunity to remake their imperfect union after this long and continuing crisis. And perhaps we have lessons to relearn on this side of the pond, too.
    Jul 6, 2011. 04:50 PM | 5 Likes Like |Link to Comment
  • In Dimon Versus Bernanke, Dimon Wins by a Knockout [View article]
    Lao, the problem wasn't the question ... It was the answer! Cheap shot? Dimon couldn't predict Bernanke's answer. Bernanke could have made the usual Washington response ... In other words, the typical Washinton non-response.

    The reason that it made headlines is that Bernanke gave such a lame, if honest, reply.

    Bernanke's no neophyte. He takes hard questions all the time. But his answer was, in Washington terms, a gaffe of the worst order. It was, in other words, truthful, if too revealing of how the Fed's inadequacies.

    The press' response has been so interesting. The NYTimes called
    it an "ambush". Really? What were so many heads of the world's great financial institutions there for? To pitch softballs at the Fed chairman? The press should be asking the hard questions, but doesn't.
    Jun 11, 2011. 10:49 PM | Likes Like |Link to Comment
  • Rulemakers at the Fed Need to Come Out of Their Ivory Tower [View article]
    Regulation is more than adequate; rather, what we need is better regulation, more intelligent, wakeful oversight. There are many causes of any panic. It wasn't just the banks. Here's my list:
    Jun 10, 2011. 04:34 PM | 1 Like Like |Link to Comment
  • Rulemakers at the Fed Need to Come Out of Their Ivory Tower [View article]
    In my neighborhood, my utilities do such a poor job that we sometimes have service disruptions that last as long as a week. Happens perhaps twice a year on average. So if that's what you want, that's what you should expect.
    Jun 10, 2011. 01:57 PM | 2 Likes Like |Link to Comment
  • Rulemakers at the Fed Need to Come Out of Their Ivory Tower [View article]
    In Washington's terms, Bernanke's answer was a "gaffe", an answer that was accidentally more truthful than intended by the speaker.

    But Bernanke is partial to unfortunate policy decisions. He was Fed chairman when he engineered the ruinous and entirely unnecessary 18-month long inversion of the yield curve (2006 through late 2007) that helped destroy housing markets, pushed most participants to reach for yields, and disrupted the money markets (e.g., SIVs), the unhappy effects of which we still experience.

    He didn't understand the consequences of his actions then. No reason, I suppose, that we should expect such understanding today. What's remarkable is his candor that that's the case.
    Jun 10, 2011. 12:44 PM | 3 Likes Like |Link to Comment
  • Bank Stocks Could Benefit From Durbin Amendment Delay [View article]
    As I understand Tester, there's no change that debit card transactions will be regulated henceforth. It only allows the Fed to consider all reasonable costs and profit in its rule.
    Jun 8, 2011. 01:09 PM | Likes Like |Link to Comment