Could JPMorgan Chase Be Hit with a Fourth Felony Count for Rigging Precious Metals Markets?

By Pam Martens and Russ Martens: June 11, 2019 ~ On September 25, 2013, after spending five years and 7,000 hours using taxpayers’ money investigating the potential rigging of the silver market, the Commodity Futures Trading Commission (CFTC) concluded that “there is not a viable basis to bring an enforcement action with respect to any firm or its employees related to our investigation of silver markets.” The investigation was provoked by multiple complaints asserting the market was rigged. The CFTC is a Federal regulator that oversees the U.S. commodities markets. The U.S. Department of Justice (DOJ) is also a Federal agency and the only one that can bring a criminal case against firms and individuals who commit conspiracy and fraud in commodity and securities markets. (The Securities and Exchange Commission can bring only civil, not criminal, cases.) On October 9 of last year, the DOJ used its criminal powers and … Continue reading

Beware of the Junk Bond (High Yield) Market

Yield on 10-Year U.S. Treasury Note versus iShares iBoxx High Yield Corporate Bond ETF Since December 14, 2018

By Pam Martens and Russ Martens: June 10, 2019 ~ On Friday markets digested the nonfarm payrolls report from the U.S. Labor Department showing a weak job growth in May of just 75,000. That news adds to a myriad of other economic data, including a slowdown in durable goods orders, that suggest a deceleration of the U.S. economy. The Atlanta Fed’s closely watched GDPNow indicator is showing a very weak 1.4 percent forecast for the second quarter of this year. The 10-year U.S. Treasury note has duly noted the deceleration in the economy and has fallen from a yield of 2.9 percent since the middle of December to 2.08 percent at Friday’s close. The yield of the U.S. Treasury has an inverse relationship to its price. That is, as the market value of the Treasury note rises, the yield declines. Thus, as the perception grows that the U.S. economy is … Continue reading

The Fed’s Glue-Sniffing Announcement Yesterday Involving JPMorgan Chase

Jamie Dimon, Chairman and CEO, JPMorgan Chase

By Pam Martens and Russ Martens: June 7, 2019 ~  Federal Reserve inspectors appear to be on some kind of mind-altering drug or their superiors are simply taking their marching orders from Wall Street cronies in the Trump Administration. Yesterday the Fed released a terse 104-word statement indicating that the largest and serially charged bank in the U.S., JPMorgan Chase, had shown “evidence of substantial improvements” in its “risk-management program and internal audit functions” and the Fed was therefore removing the dog collar it had put on the bank in January 2013. (JPMorgan Chase had been required to provide written progress reports to the New York Fed in 2013 until further notice – which became six years.) The Fed’s actions in 2013 stemmed from JPMorgan Chase secretly gambling with depositors’ money in exotic derivatives in London and losing at least $6.2 billion of those funds. The incident became infamously known … Continue reading

Public Interest Groups Blast SEC for Shilling for Wall Street’s “Best Interest”

Christine Lazaro, President, PIABA

By Pam Martens and Russ Martens: June 6, 2019 ~ The long-awaited final rule from the Securities and Exchange Commission called Regulation Best Interest, which grew out of the 2010 Dodd-Frank financial reform legislation and was intended to require that the nation’s stockbrokers put their clients’ interests ahead of their own, was voted on by the SEC yesterday. Three Republican Commissioners voted for it while the sole Democrat, Robert Jackson, voted against it and issued a detailed statement on why it sells out Main Street. SEC Chairman, Jay Clayton, was one of the three who voted in favor of passing the rule. Prior to joining the Trump administration as SEC Chair, Clayton was a law partner at one of Wall Street’s go-to law firms, Sullivan & Cromwell, where he had represented 8 of the 10 largest Wall Street banks within the prior three years. (See related articles below for how … Continue reading

Yesterday’s Market Rally Was a Short Squeeze, Not a Reaction to Powell’s Speech

Jerome Powell Is Sworn In As Federal Reserve Chairman on February 5, 2018 by Fed Vice Chairman Randal Quarles.

By Pam Martens and Russ Martens: June 5, 2019 ~ It felt like headline writers were out to engineer a stock market rally yesterday by scaring hedge funds that had shorted the market to the tune of tens of billions of dollars. When traders who are short the market act simultaneously on breaking news, (news that suggests the stock market is going to rally), by buying back stock to close out their short positions, that causes a big upward spike in the stock market. In Wall Street parlance, it’s called a short squeeze. It happens a lot in a secular bear market and is a head fake to investors desperately looking for a bullish trend. A number of major business publications put a bullish spin on what the Chair of the Federal Reserve, Jerome Powell, actually said in his opening remarks yesterday morning at a conference sponsored by the Federal … Continue reading

What’s Behind the New Anti-Trust Movement around Google, Amazon and Facebook?

By Pam Martens and Russ Martens: June 4, 2019 ~  On August 26, 2015 the market capitalization of just five Big Tech stocks totaled $1.889 trillion at the close of trading that day. Here’s the tally: Apple $625.532 billion; Google, $440.767 billion; Microsoft, $341.594 billion; Facebook, $245.795 billion and Amazon, $234.215 billion. At the close of trading yesterday, those numbers stacked up like this: Apple $797.366 billion; Google $720.206 billion; Microsoft $918.312 billion; Facebook $467 billion; and Amazon, $833.365 billion – or a total of $3.736 trillion – almost a doubling of market value in less than four years. Of particular note is that Amazon has increased its market value by more than three and a half times, despite its inability to show profits for much of its existence. In December 2013, the International Business Times reported as follows about Amazon’s abysmal history of profits: “So what’s with Wall Street’s … Continue reading

Mnuchin’s Dangerous Plan to Deregulate Wall Street Is Captured in this Chart

Prudential Financial Traded as a Clone to the Big Wall Street Banks from October to December of Last Year.

By Pam Martens and Russ Martens: June 3, 2019 ~ U.S. Treasury Secretary Steve Mnuchin (a/k/a the former foreclosure king) has been attempting to dismantle regulatory restraints on Wall Street’s worst instincts since he took office. Making Mnuchin even more dangerous is the fact that, under statute, he simultaneously sits as head of the Financial Stability Oversight Council (F-SOC) even as he appears to be attempting to undermine financial stability in the U.S. One of Mnuchin’s most alarming actions on behalf of F-SOC came last October 17 when the Council announced that it was removing the designation of Prudential Financial as a SIFI – a Systemically Important Financial Institution that required enhanced supervision and prudential standards. Mnuchin stated at the time: “The Council’s decision today follows extensive engagement with the company and a detailed analysis showing that there is not a significant risk that the company could pose a threat … Continue reading

Lordy, Deutsche Bank Is Having a Helluva Bad Month

Deutsche Bank Stock Price 2001 through May 30, 2019

By Pam Martens and Russ Martens: May 30, 2019 ~  Thanks to former FBI Director James Comey, there are now acceptable times when the 19th century word “Lordy” can be demonstrably exclaimed in public settings. For example, it can be used with pretty much anything to do with the President of the United States or, as we are now suggesting, when referring to the management of Trump’s serially-charged banking establishment, Deutsche Bank. After setting an historic intraday low of $6.82 yesterday on the New York Stock Exchange, shares of Deutsche Bank mustered a tiny rally in the last half hour of trading today to eke out a close of $6.91. Just 12 years ago, this was a $120 stock. The bank now has a market capitalization of $14.18 billion supporting assets of $1.6 trillion. (Perhaps “supporting” is not the right word. Lordy!) According to the bank’s 2018 annual report, it … Continue reading

Americans Should Be Gravely Concerned with this Wall Street Court Case

New York Stock Exchange Trading Floor

By Pam Martens and Russ Martens: May 30, 2019 ~ Financial media is buzzing this week that a Federal District Court Judge for the Southern District of New York, Jesse Furman, has ruled that the City of Providence, Rhode Island, the Plumbers and Pipefitters National Pension Fund, along with other plaintiffs, can move forward with their class action lawsuit against seven stock exchanges, including the New York Stock Exchange and Nasdaq, for allegations that they effectively rigged the market against the small investor. That sounds like a great David versus Goliath court case is moving right along toward a triumph for justice – until one looks at the gritty details of the case. The lawsuit was launched five years ago following the publication of the book, Flash Boys, by bestselling author and Wall Street veteran, Michael Lewis. The book mapped out, with eyewitness accounts and extensive detail, how the stock … Continue reading

Two Key Execs at New York Fed Head for the Exits – Two Business Days After Sharp Cut in GDP Estimate

Trader on the Open Markets Trading Desk at the Federal Reserve Bank of New York

By Pam Martens and Russ Martens: May 28, 2019 ~ Simon Potter, who runs the Federal Reserve’s open market operations at the Federal Reserve Bank of New York, is stepping down at the end of this week, as is Richard Dzina, head of the New York Fed’s Financial Services Group. Wall Street is buzzing over the fact that the two are long-tenured executives at the New York Fed;  are exiting simultaneously, and with only a four-day notice to the public and the markets – suggesting that their departure may not have been voluntary. The praise lavished on the pair in the press release issued today by John Williams, President of the New York Fed, also suggests that an effort is being made to soften the blow of their surprise departure. Potter is responsible for carrying out the monetary policy mandate of the Federal Open Market Committee (FOMC) by supervising the … Continue reading

Yes, America, a Banking Cartel Exists and Here’s the Proof

By Pam Martens and Russ Martens: May 28, 2019 ~  Wall Street is the only industry in America that is allowed, in broad daylight, to operate its own private justice system while making its employees and customers sign binding contracts to take their complaints to that venue to seek justice. That’s like sticking your arm into the mouth of an alligator that just grabbed your purse and expecting to come out whole. Endless reports by journalists on how rigged this private justice system is have done nothing to reopen the nation’s courthouse doors to claims against Wall Street. Not only do the general counsels of Wall Street’s biggest global banks get to fashion their own system to hear claims against the banks but they get to meet in secret for two decades to strategize on other topics impacting their common interest. In 2016, Bloomberg reporters Greg Farrell and Keri Geiger broke … Continue reading

Market Sends Scary Signals; Atlanta Fed’s GDPNow Forecasts Anemic 1.3% Growth

Yield on U.S. 10-Year Treasury Note, October 1, 2017 through May 23, 2019

By Pam Martens and Russ Martens: May 24, 2019 ~ Most stock owners of J.C. Penney never thought they’d see the day when it traded as a penny stock. But that’s what happened yesterday when shares of the large retailer closed at 91 cents, a loss of 9.79 percent on the day. The macro picture is that J.C. Penney employs 95,000 people and operates 864 stores across the United States. Its future will have an impact on jobs and commercial real estate prices in the United States. At 91 cents a share, those prospects aren’t looking too good right now. The broader markets fared better than J.C. Penney yesterday but were, nonetheless, a sea of red. After being down more than 400 points intraday, the Dow Jones Industrial Average closed with a loss of 286 points or 1.11 percent at 25,490. The Nasdaq, laden with tech losers, lost 122.5 points … Continue reading

Hearing Profiles Treasury Secretary Mnuchin as Dark Villain to Rule of Law

By Pam Martens and Russ Martens: May 23, 2019 ~ U.S. Treasury Secretary Steve Mnuchin appeared yesterday before the House Financial Services Committee. You know it was a bad day for the Secretary when the low point was not Congressman Stephen Lynch’s request to the Chair, Maxine Waters, to have Mnuchin held in contempt for not following the statute that calls for the IRS to turn over tax returns on any American when requested by an authorized Committee of Congress. Mnuchin has said he will not turn over the tax returns of the President of the United States, which are under subpoena by Congress. (The Internal Revenue Service, which holds these tax returns, is an agency of the U.S. Treasury.) Waters said she will seek the advice of the Committee’s counsel on the contempt request. A number of Democratic members of the Committee intensely questioned Mnuchin on  his myriad deregulatory … Continue reading

Head of Anti-Money Laundering Agency Tells Senate Hearing He Hasn’t Read the Times Bombshell on Trump, Kushner and Deutsche Bank

Kenneth Blanco, Director of FinCEN

By Pam Martens and Russ Martens: May 22, 2019 ~ Reading the New York Times is apparently now seen as being disloyal to the President of the United States if you’re a Federal employee. Just holding the newspaper in one’s hands might be enough to become an early pensioner in the Trump administration. Yesterday it became crystal clear at a Senate Banking hearing just how terrified people are in the Federal government of getting on the wrong side of the President and ending up being publicly bashed on his Twitter page. The Senate Banking hearing on Tuesday was called to get answers from the witness panel on how to combat money laundering in the United States by shell companies that keep their real owners a secret. But it quickly became a hearing also about the bombshell report from the New York Times on Sunday. That article, by David Enrich, describes … Continue reading

How Bad Are Things on Wall Street? JPMorgan and Goldman Sachs Offer No Minimum Accounts

By Pam Martens and Russ Martens: May 21, 2019 ~ After chasing the super rich for a century, JPMorgan and Goldman Sachs are now offering no minimum accounts. As we will explain shortly, their motives may not be all that altruistic. In March of 2016, the Wall Street Journal’s Emily Glazer reported that clients of JPMorgan Chase’s Private Bank “will be required to have at least $10 million in investible assets, twice the current minimum of $5 million.” What smells like real money to Goldman Sachs has also been eight-figures and higher. In 2013, the New York Times reported that Goldman had a $10 million minimum to manage private wealth and was booting out its own employees’ accounts if they were less than $1 million. High net worth individuals are what each of the mega Wall Street banks look for since the more money the bank invests, the more fees it generates … Continue reading

Trump, Kushner and the Times Bombshell: What You Should Know About “Private” Banking in New York City

By Pam Martens and Russ Martens: May 20, 2019 ~ Yesterday, every U.S. television network carried the New York Times bombshell that Deutsche Bank employees had flagged suspicious activity in the bank accounts of President Donald Trump and his son-in-law, Jared Kushner, involving foreign money flows, but their superiors at Deutsche Bank did not allow the reports to be filed with the Financial Crimes Enforcement Network (FinCEN), a unit of the U.S. Treasury that is mandated under law to receive and investigate such reports. From there the news went viral around the globe, landing on cable news, Reuters and in European newspapers. (Shortly after trading opened this morning on the New York Stock Exchange, Deutsche Bank’s stock traded at an all-time low of $7.39. This was a $120 stock in 2007.) There is no disputing the fact that this is a critical development, for the following key reasons that we will … Continue reading

As Regulators Squirm in their Seats at Hearing, JPMorgan and Citigroup Get Slapped with More Rigging Charges by EU

Congresswoman Maxine Waters

By Pam Martens and Russ Martens: May 17, 2019 ~ At a House Financial Services Committee hearing yesterday, Republicans attempted to marshal arguments for why U.S. banks needed more relief from regulatory oversight. Those arguments weren’t helped by the news of the day. As the hearing got underway, headlines were being promulgated around the globe that JPMorgan Chase, Citigroup and three foreign banks had been fined $1.2 billion by the European Commission for rigging foreign exchange markets. The U.S. Department of Justice leveled criminal felony charges on the same two U.S. banks in 2015 for rigging the same market. Both banks admitted to the charges at that time. A decade after the greatest financial crash in the United States since the Great Depression; after the Dodd-Frank financial reform legislation has failed miserably in stopping the ongoing crime spree by Wall Street’s largest banks; and as radical right-wing members of Congress … Continue reading

Here’s Why You Can’t Trust the Federal Reserve’s Financial Stability Report

Randal Quarles

By Pam Martens and Russ Martens: May 16, 2019 ~ What the United States desperately needs is less Financial Stability Reports and actual financial stability – rather than the Wall Street Casino in drag as Federally-insured banks. The Office of Financial Research (OFR), created under the Dodd-Frank financial reform legislation of 2010, publishes a Financial Stability Report; the Financial Stability Oversight Council (F-SOC), also created under Dodd-Frank legislation, publishes an annual report to call attention to any emerging threats to financial stability; and, not to be left out, the Federal Reserve has decided it needs to have its own say in its own Financial Stability Report – ostensibly to make it appear that it’s on top of the threats emanating from its charges on Wall Street – which it decidedly is not. Another reason the Fed may want its own Financial Stability Report is to create the illusion that things … Continue reading

Wall Street’s Sleeping Cops Head to the Hill Tomorrow

By Pam Martens and Russ Martens: May 15, 2019 ~ The House Financial Services Committee, Chaired by Democratic Congresswoman Maxine Waters, has been doing the heavy lifting for Congress when it comes to oversight of the mega banks on Wall Street. After grilling the CEOs of these banks on April 10, the Committee will convene again tomorrow to grill the Federal regulators of these serially charged mega banks. The witness list includes: Rodney Hood, Chairman, National Credit Union Administration; Jelena McWilliams, Chairman, Federal Deposit Insurance Corporation (FDIC); Joseph Otting, Comptroller, Office of the Comptroller of the Currency (OCC); and Randal Quarles, Vice Chairman of Supervision, Board of Governors of the Federal Reserve System. The Committee has released a very impressive Memorandum, which lays out the Frankenbank framework that exists in the United States today. For example, consider this one sentence from the Memorandum: “U.S. G-SIBs [Global Systemically Important Banks] made … Continue reading

JPMorgan Chase Owns $2.2 Trillion in Stock Derivatives; Two-Thirds the Total for All Banks

By Pam Martens and Russ Martens: May 15, 2019 ~ According to the Office of the Comptroller of the Currency (OCC), the regulator of national banks, as of December 31, 2018 JPMorgan Chase Bank NA (the Federally-insured bank backstopped by U.S. taxpayers) held $2,212,311,000,000 ($2.2 trillion) in equity derivatives. Equity is another name for stock. The OCC also reported that all commercial banks in the U.S. held a total of $3.374 trillion in equity derivatives at the end of last year, meaning that for some very strange reason, JPMorgan Chase holds a 65.5 percent market share of bank trading in this derivatives market. Those trillion dollar figures are notional amounts, meaning the face value. The OCC defines “notional” like this: “The notional amount of a derivative contract is a reference amount that determines contractual payments, but it is generally not an amount at risk. The credit risk in a derivative … Continue reading

Trade Wasn’t the Only Problem in the Market Yesterday: Citigroup Tanked 5.18%

By Pam Martens and Russ Martens: May 14, 2019 ~ Allow us to set the stage for what happened in yesterday’s market rout which saw the Dow Jones Industrial Average shed 617 points. The easy answer is that the market is unnerved by the ongoing trade war between the Trump administration and China. And, clearly, that’s part of the problem. But the market is also keenly aware that there are a handful of mega banks on Wall Street that have monster exposure to derivatives and are systemically interconnected to the counterparties on the other side of those trades. The problem is that nobody, including the regulators, has clarity on which counterparty is in over their head and may have failed to reserve adequate capital if it has to pay out on too many losing derivative trades. That’s what happened in 2008 when a unit of the giant insurer, AIG, had … Continue reading

The Untold Story of the Paul Weiss Internal Investigation that Didn’t Catch a Massive Stock Fraud

By Pam Martens and Russ Martens: May 13, 2019 ~ The legal press has been having a field day with how the U.S. Department of Justice, funded by U.S. taxpayers to conduct its own serious and unbiased investigations, has been outsourcing its investigations to the criminal target and its outside counsel – specifically, the law firm Paul, Weiss, Rifkind, Wharton & Garrison. The case making the headlines involves Deutsche Bank. But another Paul Weiss internal investigation that has escaped meaningful scrutiny by mainstream media involves China Medical Technologies. The U.S. Department of Justice now describes this company as a massive securities fraud that dates back to the time that Paul Weiss conducted one of its internal investigations and came up empty-handed – or, at least, that’s what China Medical Technologies told the Securities and Exchange Commission in an official filing document. China Medical Technologies went public in the U.S. in … Continue reading

These Two Charts Show the Shocking Truth Behind the Sanders/AOC Plan to Cap Credit Card Interest Rates

By Pam Martens and Russ Martens: May 10, 2019 ~ Calling 20 and 30 percent credit card interest rates “extortion and loan sharking,” Senator Bernie Sanders and Congresswoman Alexandria Ocasio-Cortez yesterday introduced the ‘‘Loan Shark Prevention Act’’ which would set a Federal cap of 15 percent on interest rates that can be charged to consumers. In introducing the new legislation, Sanders and Ocasio-Cortez singled out the mega Wall Street banks, writing the following in a white paper they released simultaneously with the proposed legislation: “Today’s modern-day loan sharks are no longer lurking on street corners, threatening violence to collect their payments. Today’s loan sharks wear expensive suits and work on Wall Street, where they make hundreds of millions of dollars in total compensation by charging sky-high fees and usurious interest rates, and head financial institutions like JP Morgan Chase, Citigroup, Bank of America, and American Express… “Despite the fact that … Continue reading

Could Trump’s Jones Day Lawyers End Up in Deutsche Bank-Gate?

Deutsche Bank Headquarters in Frankfurt, Germany

By Pam Martens and Russ Martens: May 9, 2019 ~ Lawyers from Jones Day have been functioning like a Praetorian Guard around the president since the day he took office. How the firm landed so many of its partners into key positions in the Trump administration has baffled the media, especially since its partners were big supporters of Hillary Clinton’s campaign. According to Bloomberg News, Jones Day’s lawyers contributed $7,422 to Trump’s campaign while showering Hillary Clinton’s campaign with $267,899. Wall Street On Parade has previously reported that Jones Day lawyers in Trump’s White House Counsel office had previously represented Freedom Partners, the front group of Koch Industries, the giant fossil fuels company majority owned by the billionaire Koch brothers. Freedom Partners had quickly provided the Trump administration with a list of regulations it wanted gutted – like the Paris Climate accord (which Trump revoked on June 1, 2017) and numerous EPA rules. … Continue reading

A Troublesome Thing Happened in Yesterday’s Market Selloff

By Pam Martens and Russ Martens: May 8, 2019 ~  For years now, Wall Street On Parade has been pointing out to our readers that the Wall Street mega banks remain dangerously interconnected, despite the fact that those interconnections stopped banks from lending to one another in 2008; resulted in the largest government bailout of Wall Street in U.S. history; and ended up taking down the U.S. housing market and global economy. Whenever there is a major selloff in the broader stock market, the Wall Street mega banks typically bleed far more than the major stock indices. Yesterday, however, something curious and potentially noteworthy happened. The Dow Jones Industrial Average lost 473.3 points or 1.79 percent and the following Wall Street banks traded in line with that decline: JPMorgan Chase actually lost a little less than the Dow with a decline of 1.63 percent. Bank of America and Goldman Sachs … Continue reading