By Pam Martens and Russ Martens: June 2, 2023 ~ Last week, on Tuesday, May 23, the Federal Reserve and California Department of Financial Protection and Innovation (the state banking regulator) hit the collapsed federally-insured bank, Silvergate Bank, and its parent, Silvergate Capital Corporation, with an enforcement action called a “Cease and Desist Consent Order.” The action was not announced to the public until yesterday. A Consent Order is meant to function along the lines of a legal settlement, with the bank agreeing to the detailed terms of the Consent Order and waiving its right to judicial review. The individual signing the Consent Order on behalf of the bank was its controversial CEO, Alan Lane, who had allowed his federally-insured bank to get in bed with Sam Bankman-Fried’s house of frauds, including the FTX crypto exchange and Bankman-Fried’s hedge fund, Alameda Research. Lane also had allowed his deposit base to become … Continue reading →

By Pam Martens and Russ Martens: June 1, 2023 ~ After much delay and legal protests by JPMorgan Chase, its Chairman and CEO, Jamie Dimon, was forced by a Manhattan federal court to testify under oath in a deposition about what he personally knew about the bank’s long-term customer relationship with child sex trafficker Jeffrey Epstein. (Epstein died in a Manhattan jail on August 10, 2019. His death was ruled a suicide by the medical examiner.) The deposition was held last Friday, May 26, at the offices of JPMorgan Chase in Manhattan. In a surprise move, opposing counsels agreed yesterday to release the transcript of the deposition, with some segments marked as sensitive and redacted. The deposition arose as a result of two lawsuits being heard by Judge Jed Rakoff in the U.S. District Court for the Southern District of New York. One lawsuit is on behalf of an alleged sexual … Continue reading →

By Pam Martens and Russ Martens: May 31, 2023 ~ Last Friday, at the start of Memorial Day weekend, researchers at the International Monetary Fund (IMF) released an analysis of where they think the U.S. economy is headed and the headwinds (read gale force winds) that can, potentially, be expected along the way. Folks on Wall Street who were hoping that the Fed was at the end of its rate-hiking cycle, with a more dovish Fed juicing stock market returns later this year, likely had their holiday weekend ruined with this projection from the IMF: “Achieving a sustained disinflation will necessitate a loosening of labor market conditions that, so far, has not been evident in the data. To bring inflation firmly back to target will require an extended period of tight monetary policy, with the federal funds rate remaining at 5¼–5½ percent until late in 2024.” The Fed’s inflation target is … Continue reading →

By Pam Martens and Russ Martens: May 30, 2023 ~ Wall Street mega banks, as well as others, are moving vast amounts of their debt securities from one accounting category to another accounting category in order to stretch out unrealized losses over the life of the instrument. As the FDIC chart above indicates, as of December 31, 2022 unrealized losses on investment securities at U.S. banks stood at more than $600 billion. According to JPMorgan Chase’s 10-K (Annual Report) filings with the Securities and Exchange Commission, over the past three years it has moved a total of $347 billion (yes, “billion” with a “b”) of investment securities from the accounting category called “Available-for-Sale” (AFS) to the accounting category called “Held-to-Maturity” (HTM). JPMorgan Chase’s 2022 10-K advises as follows: “During 2022 and 2021, the Firm transferred $78.3 billion and $104.5 billion of investment securities, respectively, from AFS to HTM for capital management purposes.” JPMorgan … Continue reading →

By Pam Martens and Russ Martens: May 25, 2023 ~ Unlike his three immediate predecessors who chaired the Federal Reserve (Janet Yellen, Ben Bernanke and Alan Greenspan), who all had doctoral degrees in economics, the current Fed Chairman, Jerome Powell, has a law degree from Georgetown University. Given his legal education, one might have expected that when Fed Chair Powell became aware of the largest trading scandal in the Fed’s history in September of 2021, he would have done his legal due diligence to determine where to refer the matter for investigation. While multiple Wall Street watchdogs called for Powell to refer the investigation to the U.S. Department of Justice and the Securities and Exchange Commission – which conduct all legitimate insider trading investigations involving publicly-traded stocks — the Fed instead referred the investigation on October 4, 2021 to the Federal Reserve Board’s own Inspector General, who is appointed by the … Continue reading →

By Pam Martens and Russ Martens: May 24, 2023 ~ This Friday and Saturday, JPMorgan Chase’s Chairman and CEO, Jamie Dimon, is scheduled to sit for some very uncomfortable questioning in a deposition concerning what role he played in allowing his bank to serve as a vast cash conduit for Jeffrey Epstein, which enabled Epstein to perpetuate his sex trafficking of underage girls. The Attorney General’s office of the U.S. Virgin Islands (USVI) has filed a federal lawsuit against JPMorgan Chase that makes devastating charges against the largest bank in the United States. It alleges that JPMorgan Chase sat on a mountain of evidence that Jeffrey Epstein was running a child sex trafficking ring as it continued to keep him as a client; accept his lucrative referrals of wealthy clients; and provided him with large sums of cash and wire transfers to pay off victims – one of whom was a “14-year old … Continue reading →

By Pam Martens and Russ Martens: May 23, 2023 ~ The Fed has been under non-stop scandals for the past two years. It pumped out trillions of dollars in repo loans to Wall Street’s casino banks beginning on September 17, 2019 and then made up a hokey excuse to cover up its massive bailout of banks it is incompetent to supervise. After former Dallas Fed President, Robert Kaplan, was caught trading like a hedge fund kingpin while sitting on confidential Fed information, the Fed’s Board of Governors had the audacity to refer the matter to its own Inspector General, who reports to the Fed’s Board of Governors and can be fired by it. Not surprisingly, 19 months later there’s still no word on this investigation. Then there was the President of the St. Louis Fed, James Bullard, who was caught giving a private meeting with Citigroup clients. The New York Fed … Continue reading →

By Pam Martens and Russ Martens: May 22, 2023 ~ Pretty much everything the average American has read about the banking crisis is wrong. And there is at least a prima facie case that could be made that Big Media is responsible for that misinformation. Let’s start with the dozens of mainstream media reports that small banks were bleeding deposits and these deposits were flooding into the biggest banks in the U.S. as a safe haven. Those reports gave the distinct impression that the mega banks on Wall Street are viewed by Americans as a safe place to stash money, never mind that they blew up the U.S. financial system in 2008 and still have more than $200 trillion in derivatives lurking in the shadows. According to FRED data compiled by the St. Louis Fed (see chart above), bank deposits at the 25 largest U.S.-chartered commercial banks peaked at $11.556 trillion … Continue reading →

By Pam Martens and Russ Martens: May 18, 2023 ~ On Wednesday, March 8 of this year, the holding company for the federally-insured Silvergate Bank announced it was winding down the bank. It had little choice but to do so. It was experiencing a bank run and had incinerated its reputation by focusing on deposits from crypto companies, including those majority-owned by indicted crypto kingpin, Sam Bankman-Fried. According to testimony from the Chairman of the Federal Deposit Insurance Corporation (FDIC), Martin Gruenberg, before the Senate Banking Committee on March 28, “in the fourth quarter of 2022, Silvergate Bank experienced an outflow of deposits from digital asset customers that, combined with the FTX deposits, resulted in a 68 percent loss in deposits – from $11.9 billion in deposits to $3.8 billion.” Silvergate Bank’s primary regulator was the San Francisco Fed. Two days later, on Friday, March 10, Silicon Valley Bank was put … Continue reading →

By Pam Martens and Russ Martens: May 17, 2023 ~ Last year, newspapers across America were buzzing with the enticing yields available on U.S. savings bonds, Treasury bills and Treasury notes. It’s now apparent that millions of Americans got the message to move out of the meager yields being offered on savings accounts and money market at their bank and move to the free accounts and government-backed instruments offered by TreasuryDirect.gov. Investors, small and large, can buy directly from the U.S. Treasury at this site. According to data provided by TreasuryDirect, new account openings in 2022 surged to a total of 2,956,790 from a total of 460,057 in 2021 – an increase of 543 percent in one year. Even more impressive, the total par value of the savings bonds and Treasury securities purchased in those accounts went from $9,711,113,646 in 2021 to $87,775,900,168 in 2022 – an 804 percent increase. (See … Continue reading →