Will Fed Chair Powell Respond to Trump’s Jabs in His Jackson Hole Speech?

Fed Chairman Jerome Powell

By Pam Martens and Russ Martens: August 21, 2018 ~ The Chairman of the Federal Reserve, Jerome Powell, is slated to deliver a speech on Friday morning at an annual symposium in Jackson Hole, Wyoming. President Donald Trump has made it known that he wants some economic help from the Fed in terms of keeping interest rates low. Speaking of Powell directly, Trump told Reuters yesterday: “I’m not thrilled with his raising of interest rates, no. I’m not thrilled.” All eyes on Wall Street will be watching for any hints in Powell’s speech that he’s sending a message to Trump that he won’t be taking any loyalty oath to the President. But aside from possible coded messaging to Trump to take his jackboot off the Fed’s turf, there are other important reasons to pay attention to the Jackson Hole gathering. It’s called the Federal Reserve Bank of Kansas City’s Economic … Continue reading

Four Critical Changes Needed to Make Wall Street Work for America Again

NY Stock Exchange Trading Floor-150pix

By Pam Martens and Russ Martens: August 20, 2018 ~ Last Thursday the Securities and Exchange Commission (SEC) issued a statement regarding a new $10.5 million fine against Citigroup. The statement read: “Citigroup’s lax supervision and weak internal accounting controls allowed a handful of rogue traders to mismark positions over several years and, separately, resulted in the unnecessary loss of hundreds of millions of dollars of its shareholders’ assets to fraud.” Lax supervision, weak accounting controls, and losing hundreds of millions of dollars to fraud are not words the American taxpayer wants to be reading about Citigroup in 2018. This is the very same bank that received the largest bailout by the U.S. taxpayer in global banking history following its implosion during the Wall Street crash of 2008 due to grossly faulty internal controls. The reason that Citigroup was bailed out while Lehman Brothers was left to fail was that, … Continue reading

U.S. Media’s Use of Its Collective Voice Reveals a Tragic Truth about America

We Are Not Fake News (thumbnail)

By Pam Martens and Russ Martens: August 17, 2018 ~ August 16, 2018 will be remembered as the day there was a collective awakening by America’s media that there was something intrinsically and morally and constitutionally wrong with not just the functioning of the President of the United States – but with America itself. In response to an August 10 appeal from the Boston Globe to newspaper editorial boards around the country to write and publish their thoughts on Trump’s “dirty war against the free press,” more than 300 newspapers responded yesterday. The Globe’s own editorial yesterday contained one of the most poignant phrases, stating that the President tosses out lies about the media “much like an old-time charlatan threw out ‘magic’ dust or water on a hopeful crowd.” You can read the coast-to-coast outpouring of editorials on what a free press means to democracy here. One of the most … Continue reading

Deutsche Bank and Citigroup Bleed More Equity Yesterday: The Reason Should Concern Us All

Deutsche Bank Headquarters in Frankfurt, Germany

By Pam Martens and Russ Martens: August 16, 2018 ~  Spasms in big Wall Street bank stocks have been happening on a serial basis over the past three years. (See here and here.) Yesterday offered another one of those bank warning signs to a Congress intent on further deregulation of an already dangerously deregulated market. As the stock market grappled yesterday with fears of sinking emerging market currencies leading to loan defaults at European banks that are derivative counterparties to the biggest banks on Wall Street, the Wall Street banking sector was a sea of red. Two banks in particular sold off more than others. Deutsche Bank is the big German lender that trades on the New York Stock Exchange. It closed with a loss of 2.61 percent versus a much milder decline of 0.76 percent in the Standard and Poor’s 500 Index. Posting a final trade of $11.19, Deutsche … Continue reading

Derivatives: Donald Trump’s Most Dangerous Knowledge Gap

President Donald Trump Addresses a Joint Session of Congress, February 28, 2017

By Pam Martens and Russ Martens: August 15, 2018 ~ It has been soundly demonstrated that the President of the United States has a knowledge vacuum in proper presidential decorum, diplomacy, and accepted norms of behavior. Just yesterday the President Tweeted that a former black female colleague in the White House, Omarosa Manigault Newman, is a “crazed, crying lowlife” and a “dog.”  On June 25, the President Tweeted that a sitting black female member of Congress, Maxine Waters, is “an extraordinarily low IQ person,” despite her being elected to 14 consecutive terms to the House of Representatives. There’s a serious danger that the current occupant of the Oval Office defines American etiquette so far down that we are shunned by enlightened countries as a backward, rogue nation. America has already gone rogue in withdrawing from the Paris Climate Accord, the United Nations Human Rights Council, and the Iran nuclear deal. … Continue reading

Meet Dark Money’s Secret $68 Million Donor

Riverside County Sheriff Officers Guard the Entrance to a Rancho Mirage, California Luxury Resort Where the Koch Brothers Held their January 2011 Political Strategy Confab. Photo Courtesy of Michael Cline, ClineFoto.com

By Pam Martens and Russ Martens: August 14, 2018 ~ In 2010 we broke the news that a secretive nonprofit called Donors Capital Fund (with the fingerprints of billionaire Charles Koch all over it) had forked over $17,778,600 to fund a widely distributed race-baiting film in the weeks before the 2008 election – an election in which the first black man, Barack Obama, was the Democratic candidate for President. Donors Capital Fund accepts donations from multiple donors and keeps their identities secret, so exactly who funded the actual payment for the film is still unknown. Recently, we decided to see what Donors Capital Fund has been up to lately. We went to the publicly filed tax returns available online at the Foundation Center and Guidestar. The most recent available tax return is for 2016. Curiously, the schedule of the tax return that shows to whom disbursements were made was missing … Continue reading

The $4 Trillion Answer to Why Turkey Is Rattling Wall Street Banks and Insurers

Bank Logos

By Pam Martens and Russ Martens: August 13, 2018 ~ On Friday the Dow Jones Industrial Average closed with a loss of 196 points as contagion jitters from Turkey’s worsening situation rattled markets. Among the big Wall Street banks, these were the biggest losers: Citigroup, down 2.39 percent; Morgan Stanley, down 2.12 percent; Goldman Sachs, down 1.78 percent; Bank of America, down 1.30 percent; and JPMorgan Chase closed off by 0.98 percent. Deutsche Bank, the big German lender whose U.S. subsidiary has a big footprint on Wall Street, lost 4.68 percent. Deutsche Bank has now lost 41 percent of its market value since February. But the selloff didn’t stop there. Two big U.S. life insurers also tumbled on Friday. MetLife lost 3.19 percent while Prudential Financial was off by 2.97 percent. What do Wall Street banks and U.S. life insurers have to do with a selloff in Turkey’s currency? Not … Continue reading

Yes, James Freeman, We Do Know How Bad the Federal Reserve Is

Federal Reserve's FOMC Meeting in March 2014

By Pam Martens and Russ Martens: August 10, 2018 ~ Earlier this week, James Freeman, the Assistant Editor of The Wall Street Journal’s editorial page, wrote an opinion piece headlined as “We’ll Never Know How Bad the Federal Reserve Is.” Freeman is also a Fox News contributor so one might be prone to suspect there is that typical right-wing bias to bash the Fed. Freeman, however, has a legitimate beef. His new book, “Borrowed Time: Two Centuries of Booms, Busts and Bailouts at Citi,” with co-author Vern McKinley was published this week and Freeman laments in the article about how the Fed “hides and then destroys documents.” If you’re a journalist attempting to compile a truthful and accurate account about a financial institution or a financial era and a key institution holding those documents refuses to release them, then the American people have lost the ability to exercise oversight of … Continue reading

Koch Advances Its Wall Street Playbook, Gutting the Office of Financial Research

Dino Falaschetti, Donald Trump's Nominee to Head the Office of Financial Research, Has Close Ties to Two Koch-Funded Front Groups

By Pam Martens and Russ Martens: August 9, 2018 ~ As we have previously reported, there is indisputable documentation that Charles Koch, the fossil fuels billionaire who sits at the helm of Koch Industries, is in charge of the de-regulatory agenda in the Trump administration through a web of front groups. More proof came yesterday. Reuters announced that the Trump administration had “formally told” around 40 staff members of the Office of Financial Research (OFR) that “they will lose their jobs as part of a broader reorganization of the agency….” Reuters also reported that the agency’s budget has already been cut by 25 percent “to around $76 million.” Imagine having only $76 million to police an industry where just one of the big Wall Street banks, JPMorgan Chase, had profits of $8.32 billion in its last quarter. Charles Koch has long understood that if you can’t repeal the legislation that … Continue reading

Donald Trump’s Campaign Is Writing Out Strange Checks

President Donald Trump

By Pam Martens and Russ Martens: August 8, 2018 ~ One would think that if you are the President of the United States and the subject of a criminal investigation; and your former campaign chief is currently on trial for tax evasion and bank fraud; and your former personal attorney for a decade had his office, hotel room, home and safety deposit box raided by the FBI – you would make sure that your campaign committee would be crossing every T and dotting every I so that you didn’t land in more hot water. But if you are Donald Trump, living close to the edge is what you do best. A review at the Federal Election Commission (FEC) of the checks written from the Donald J. Trump for President, Inc. account, the principal campaign committee for Trump’s reelection, produces some doozies. Donald Trump was sworn in on January 20, 2017 … Continue reading

Facebook Opens Door to More Federal Probes by Asking Banks for Data

Facebook CEO Mark Zuckerberg Testifies Before Congress on April 10, 2018 on His Company's Technology Failings

By Pam Martens and Russ Martens: August 7, 2018 ~ Facebook is beginning to resemble one of those frat boys at a boozy party who keeps asking guys to punch him in the stomach to prove his masculinity. At a time when it’s under scrutiny on multiple continents for sharing its users’ personal information without their consent, it has decided to ask big U.S. banks to share their customers’ financial transaction information with Facebook, according to a report yesterday in the Wall Street Journal. The Journal reported that “The social-media giant has asked large U.S. banks to share detailed financial information about their customers, including card transactions and checking-account balances, as part of an effort to offer new services to users.” Three of the banks mentioned, JPMorgan Chase, Citigroup and Wells Fargo, have been serially in trouble with Federal regulators for abusing their customers. The idea that these Wall Street … Continue reading

Financial Health of U.S. Consumer Will Determine Severity of the Next Recession

Total U.S. Household Debt and its Composition as of First Quarter 2018 (Source -- New York Fed)

By Pam Martens and Russ Martens: August 6, 2018 ~ Approximately two-thirds of U.S. gross domestic product (GDP) derives from the consumer. Without financially healthy consumers, the economy cannot prosper. In a July 30 interview on the cable news channel, CNBC, Jamie Dimon, the Chairman and CEO of JPMorgan Chase, the largest bank in the U.S., said that “the consumer’s in good shape; their balance sheet’s in good shape.” On May 17 the Center for Microeconomic Data at the Federal Reserve Bank of New York released its Quarterly Report on Household Debt and Credit which raised some notable questions as to whether Jamie Dimon actually has his finger on the pulse of the U.S. consumer. According to the report, “aggregate household debt balances increased in the first quarter of 2018, for the 15th consecutive quarter. As of March 31, 2018, total household indebtedness stood at $13.21 trillion,” which is $536 billion … Continue reading

Banking in the U.S. Got a Lot More Dangerous this Week

Joseph Otting, Comptroller of the Currency

By Pam Martens and Russ Martens: August 3, 2018 ~ The Trump administration seems hellbent on turning every Federal regulator into a snake oil salesman.  The latest scandal du jour comes yesterday from Politico’s Ben Lefebvre who reports that the Inspector General of the Interior Department is investigating whether the Interior’s head honcho, Ryan Zinke, colluded with the head of Halliburton to build him his dream brewery in his hometown of Whitefish, Montana. Against that backdrop, the Office of the Comptroller of the Currency (OCC) announced on Tuesday that financial technology companies, known as fintech, which provide various types of banking activities other than accepting insured deposits, will now be allowed to apply for a special purpose national bank charter and operate across state lines. The OCC announcement promptly followed a report from the U.S. Treasury which recommended that the OCC make the charter available. The immediate impact of gaining such a charter would … Continue reading

Wall Street’s Former Timid Cop, Mary Jo White, to Investigate Sex Allegations Against Les Moonves

Leslie Moonves, Chairman and CEO of CBS Corp.

By Pam Martens and Russ Martens: August 2, 2018 A few minutes before midnight last night, CBS News announced that the Board of its parent corporation, CBS Corp., was putting two outside law firms in charge of investigating the sexual harassment allegations against its Chairman and CEO, Leslie (Les) Moonves and other executives in its CBS News division. Those two law firms are Covington & Burling and Debevoise & Plimpton.  According to the statement from CBS, the investigation at Covington & Burling “will be led by Nancy Kestenbaum and at Debevoise & Plimpton it will be led by Mary Jo White.” The selection of Mary Jo White is not likely to instill confidence among institutional holders of CBS stock who are familiar with her tenure as Chair of the Securities and Exchange Commission (SEC) during the Obama administration. The sexual allegations were revealed in an in-depth article by Ronan Farrow … Continue reading

Trump and Charles Koch in a Tiff? Don’t Believe a Word of It

Koch Thumbnail

By Pam Martens and Russ Martens: August 1, 2018 ~ It only took one day for the so-called tiff between President Donald Trump and billionaire puppet-master, Charles Koch, to land on the front page of the New York Times after being widely reported on cable news last evening. In a tweet yesterday, Trump called Charles Koch and his brother, David, “a total joke” and said he had “beaten them at every turn.” Charles Koch is the Chairman and CEO of one of the largest private companies in the world, Koch Industries, a fossil fuels and chemicals conglomerate that has been a serial polluter of the air and water for decades. He and his brother, David, each have an estimated net worth of $51 billion according to Forbes, owing to their majority ownership of Koch Industries. In June, David stepped down from all management functions at Koch Industries as well as … Continue reading

JPMorgan’s Creepy Patent: Why You Should Be Worried

Stephen Colbert Suggested This Christmas Card for Jamie Dimon

By Pam Martens and Russ Martens: July 31, 2018 ~ Less than seven months after a unit of JPMorgan Chase settled with the Federal Energy Regulatory Commission (FERC) for $410 million in penalties and disgorgement over allegations that it had manipulated electricity markets in California and the Midwest, one of its employees, Shawn Wesley Alexander, submitted a really creepy patent request to the U.S. Patent and Trademark Office on February 10, 2014. The patent might not be creepy for the owner of a video game arcade but JPMorgan Chase is the largest bank in America – with a global footprint and an unprecedented three Federal felony counts to which it has pleaded guilty in the past four years. The first two counts came in 2014 for looking the other way at Bernie Madoff’s Ponzi scheme as the bank watched hundreds of billions of dollars come and go through his business … Continue reading

How Did Koch Industries’ Law Firm Grab Control at the White House?

Don McGahn With President Trump and First Lady Melania

By Pam Martens and Russ Martens: July 30, 2018 ~  Wall Street On Parade has previously reported that despite the majority of contributions from the Jones Day law firm’s partners flowing to the Hillary Clinton presidential campaign during 2015-2016, an unprecedented 12 of its lawyers headed to important posts in the Trump administration in one fell swoop on January 20, 2017 – Trump’s inauguration day. Equally disturbing, in May of last year, the National Law Journal reported that the former Jones Day lawyers, now firmly entrenched in the corridors of power in the Federal government, had “received a blanket waiver clearing them of ethical conflicts,” and allowing them “to take up some matters they may have worked on in prior jobs.” That might come in handy for White House Counsel Don McGahn and his Chief of Staff, Ann Donaldson, both of whom hail from Jones Day. They previously represented Freedom … Continue reading

Today’s GDP Number: Short Term Gain, Long Term Pain

Public Debt as a Percent of GDP

By Pam Martens and Russ Martens: July 27, 2018 ~ The much anticipated Gross Domestic Product (GDP) number for the second quarter of 2018 was released at 8:30 a.m. this morning. President Trump had played advance man for the number during a rally yesterday saying some were predicting it could be over 5 percent but he would be happy if it had a 4 in front of the number. The number came in at 4.1 percent with the first quarter GDP being revised up to 2.2 percent. While the President would like to see this as a lasting trend owing to the brilliance of his economic policies, experts say the U.S. is far more likely to revert back to the trend of growth in the 2 percent range. The Federal Reserve is projecting a GDP rate of 2.8 percent for all of 2018; 2.4 percent in 2019; and back to … Continue reading

Could Technology Doom Facebook, Koch Industries and JPMorgan Chase?

Facebook CEO Mark Zuckerberg Testifies Before Congress on April 10, 2018 on His Company's Technology Failings

By Pam Martens and Russ Martens: July 26, 2018 ~ Remember the late 90s when the Masters of the Universe on Wall Street were bringing to market anything that smelled of technology or had a dot com after its name. That all ended  badly with the Nasdaq stock index losing 78 percent of its value from 2000 to 2002. This is how Ron Chernow correctly described what was happening for New York Times’ readers on March 15, 2001: “Let us be clear about the magnitude of the Nasdaq collapse. The tumble has been so steep and so bloody — close to $4 trillion in market value erased in one year —  that it amounts to nearly four times the carnage recorded in the October 1987 crash.” Chernow characterized the Nasdaq stock market as a “lunatic control tower that directed most incoming planes to a bustling, congested airport known as the … Continue reading

Wall Street’s Dark Pools Get a Bonanza Wrapped as Reform by the SEC

Citi Dark Pools Puzzle-Thumbnail

By Pam Martens and Russ Martens: July 25, 2018 ~ The Securities and Exchange Commission (SEC), which has had two separate Wall Street lawyers at its helm for the past five years (under both the Wall Street- friendly Obama administration as well as the current Trump administration), has released a 558-page document that attempts to pass itself off as reforming Wall Street’s Dark Pools. Instead, it simply tinkers around the meaningless edges of reform. Dark Pools are trading venues that should not exist in an efficient, transparent and honest securities market. They are effectively unregulated stock exchanges being run internally by some of the biggest Wall Street banks on Wall Street: The same banks (like Citigroup, JPMorgan Chase, Goldman Sachs and Merrill Lynch) that have been serially charged with abusing their customers. Instead of sending their stock trades to the New York Stock Exchange or another independent stock exchange, the … Continue reading

Wall Street’s Derivatives Nightmare: New York Times Does a Shallow Dive

(Left to Right) Former Fed Chair Alan Greenspan, Treasury Secretary Robert Rubin and then Deputy Secretary of the Treasury Larry Summers

By Pam Martens and Russ Martens: July 24, 2018 ~ The New York Times published a 1300-word shallow dive into the byzantine, globally-interconnected world of financial derivatives in its print edition yesterday. After years of ignoring this seismic problem since it last blew up the U.S. financial system in 2008, what accounts for the New York Times’ newfound interest? We can sum up its 1300 word article using only three letters – CYA. What frightened the Times into this foray into the dark web of financial derivatives held by the biggest Wall Street banks was a frightening, 111-page deep dive into the subject by Michael Greenberger, a law professor at the University of Maryland’s Carey School of Law. Greenberger knows a thing or two about derivatives, having previously served from 1997 to 1999 as the Director of the Division of Trading and Markets at the Commodity Futures Trading Commission (CFTC) … Continue reading

About that Meeting Stanley Fischer Had with an Alleged Russian Spy

Stanley Fischer, Vice Chairman of the Federal Reserve

By Pam Martens and Russ Martens: July 23, 2018 According to a report at Reuters yesterday, while Stanley Fischer (the former head of the Israel Central Bank) was sitting in the curious position as Vice Chair of the Federal Reserve in 2015 (the U.S. central bank), he took a meeting with Maria Butina, whom U.S. prosecutors charged last week with being a Russian spy. That’s pretty embarrassing. But that turns out not to be the most interesting part of the Reuters story. The newswire reports that the meeting was arranged by “the Center for the National Interest, a Washington foreign policy think tank….” As it turns out, foreign policy is not exactly all that this taxpayer-subsidized nonprofit does. According to Greenpeace, based on very solid evidence, this is a “Koch Industries climate denial front group.” The Center for the National Interest publishes a magazine, National Interest, which Greenpeace says in … Continue reading

Why Did Trump Just Bully the Federal Reserve on Interest Rates

Fortune Magazine Cover

By Pam Martens and Russ Martens: July 20, 2018 ~ Could we start hearing chants of “lock him up” against Fed Chair Jerome Powell at Trump rallies? Could Powell be ridiculed as “Little Interest Rate Man” on Trump’s Twitter feed? Trump may be attempting to plant those seeds of angst in Powell’s brain. In addition to playing with Powell’s head, President Donald Trump accomplished two things in his interview on CNBC yesterday when he made it clear that he’s “not thrilled” with the Federal Reserve’s plans to continue raising interest rates. He threw more red meat to his base (many of whom want to abolish the Fed altogether) and he laid the groundwork for scapegoating the Fed if the economy goes south on his watch. Trump had this to say about the Federal Reserve raising interest rates to CNBC anchor Joe Kernen (see full interview in video below): “I’m not … Continue reading

The Next Leg of the Koch Agenda Came Before a Senate Hearing Yesterday

Charles Koch, Forbes Puts His Net Worth at $51 Billion

By Pam Martens and Russ Martens: July 19, 2018 ~ If Russia was the only major outside player to meddle in the 2016 U.S. election, why are so many of the spoils going to Charles Koch and his network of political operatives? Koch is a mega billionaire (worth $51 billion according to Forbes) and sits atop one of the largest private corporations in the world — Koch Industries – with interests in fossil fuels, chemicals, paper products and commodities trading. For the past forty years, Koch has been at the helm of a stealthy network of front groups seeking to gut Federal regulations, downsize the government and give the wealthy and corporations more sway in deciding political races. Much of that work has been accomplished through dark money, where a donor can give tens of millions of dollars in just one year to a tax exempt front group and remain … Continue reading

Treasury’s Mnuchin Just Gave the Koch’s Dark Money Machine a Bonanza

Actress Louise Linton and Husband, U.S. Treasury Secretary  Steve Mnuchin

By Pam Martens and Russ Martens: July 18, 2018 ~ The Trump administration has been the gift that keeps on giving to billionaire Charles Koch’s vast network of political front groups known as the Kochtopus. Its democracy-smothering tentacles have wrapped themselves around everything from the U.S. judicial system, to elections, to climate change, higher ed, news dissemination, and how laws are made in Washington and at the state level. (See related articles below.) Charles Koch’s wealth, and that of his brother, David, derives from their majority ownership of Koch Industries, one of the largest private corporations in the world with major interests in fossil fuels, chemicals, paper products, and commodities trading. Forbes puts their net worth at $51 billion each. The Trump administration, now packed full of Koctopus operatives, has been rapidly running a playbook for the Koch machine: withdrawal from the Paris Climate Accord – check. Tax cuts for corporations and … Continue reading