By Pam Martens and Russ Martens: December 27, 2021 ~ Maxine Waters is the Chair of the House Financial Services Committee. That Committee oversees the nation’s banks, including the megabanks on Wall Street that are serially charged by prosecutors with ever creative ways of looting the public. Waters’ Committee also oversees the bank regulators, which are frequently “captured” by Wall Street. One of those bank regulators has now come into the cross hairs of Waters. Typically, if one is a captured bank regulator, one goes to extreme lengths to hide that fact. Thus, it is unusual that the Chair of the Federal Deposit Insurance Corporation (FDIC), Jelena McWilliams (a Trump holdover), has decided she has the power to run the federal agency with an iron hand and overturn the will of her Board of Directors. Even more unusual, McWilliams is engaging in this battle with her Board in public. We’ve seen … Continue reading →

By Pam Martens and Russ Martens: December 24, 2021 ~ The Dallas Fed has not publicly announced the retirement or dismissal of its General Counsel, Sharon Sweeney. And yet, it is currently running a help-wanted ad to replace her. Sweeney is still listed as General Counsel on the Dallas Fed’s website. We placed a call to the bank’s media contact this morning to clarify the details and left a message. We’ll update this article if we receive further information. Sweeney has been with the Dallas Fed for the past 36 years. She doubles as the Dallas Fed’s Ethics Officer and put her signature to former Dallas Fed President Robert Kaplan’s outrageous financial disclosure forms, year after year. Those forms indicated that Kaplan was trading in and out of S&P 500 futures contracts in “over $1 million” trades – even in 2020 when he sat as a voting member of the Fed’s … Continue reading →

By Pam Martens and Russ Martens: December 23, 2021 ~ The Office of the Comptroller of the Currency (OCC), the regulator of national banks that operate across state lines, released a report on Monday that details the quantity and variety of derivatives held by commercial banks, savings associations and trust companies as of September 30. (According to the Federal Deposit Insurance Corporation, there were 4,914 commercial banks, savings associations and trust companies operating in the U.S. with FDIC insurance as of September 30.) The striking detail in the OCC report is that one taxpayer-backstopped, federally-insured bank, JPMorgan Chase Bank N.A., is for some unfathomable reason sitting on 62 percent of all stock (equity) derivatives held at all 4,914 federally-insured banks in the United States. The second striking detail is that this federally-insured bank’s holdings of stock derivatives come to a notional amount (face amount) of $3.3 trillion. (Yes, trillion with a … Continue reading →

By Pam Martens: December 22, 2021 ~ Two interesting things happened this week just one day apart. On Monday, the Office of the Comptroller of the Currency, the regulator of national banks, released its quarterly report on “Bank Trading and Derivatives Activities” which documented insane levels of risk at four federally-insured banks, which have merged themselves with Wall Street’s trading casinos to form Frankenbanks. The very next day, an opinion columnist at Bloomberg News, Jared Dillian, wrote a column lamenting the “loss of risk-taking” on Wall Street which he appears to blame on “excessive compliance and regulation.” The column was given the pity-party title: “The Wall Street That I Once Knew No Longer Exists.” Compare these two very disparate views of the reality on Wall Street today. The OCC’s report shares this: “The total notional amount of derivative contracts held by banks in the third quarter increased by $978.0 billion (0.5 … Continue reading →

By Pam Martens and Russ Martens: December 21, 2021 ~ Last Friday, with the public’s attention diverted to the surge in Omicron variant cases of COVID in the U.S. and holiday travelers’ attention focused on the safety of air travel and family gatherings, the Federal Reserve Bank of New York quietly announced, in a one sentence statement, that it was adding the following three federally-insured banks to its list of counterparties for its newly-minted $500 billion Standing Repo Facility: Citibank, Goldman Sachs Bank USA, and the New York Branch of Mizuho Bank. If you’re stunned that Goldman Sachs is allowed to own a federally-insured bank under existing U.S. law, see our previous report: Goldman Sachs’ Rich Man’s Bank Backstopped by You and Me. If you’re stunned that a New York branch of Mizuho Bank, part of the Japanese conglomerate Mizuho Financial Group, is able to have federal deposit insurance backstopped by … Continue reading →

By Pam Martens and Russ Martens: December 20, 2021 ~ JPMorgan Chase is the largest bank in the United States. It also has the scandalous distinction of having admitted to five criminal felony counts brought by the U.S. Department of Justice since 2014 and a breathtaking series of additional charges from other regulators. (See its Rap Sheet here.) On Friday, the Securities and Exchange Commission fined the securities unit of JPMorgan Chase $125 million for evading the ability of the SEC to adequately conduct its investigations of the bank because there was “firmwide” use by traders, supervisors and other personnel of non-official communications devices to conduct its business, while the firm failed to record and retain these messages as required by law. These new violations occurred despite similar conduct during the bank’s participation in the rigging of the foreign exchange market, which brought a criminal felony charge against the bank by … Continue reading →

By Pam Martens and Russ Martens: December 17, 2021 ~ The Nasdaq Composite Index dropped 385 points yesterday for a loss of 2.47 percent. At the lows of the day, it was down 446 points at 15,119.49. That compares with a loss of just 29.79 points on the Dow Jones Industrial Average or 0.08 percent. The Nasdaq is packed with Big Tech stocks trading at nose-bleed multiples and meager dividends, or no dividends at all. Tesla is trading at a trailing price-to-earnings ratio of 302 and pays no dividend. Amazon is trading at a trailing P/E of 67 and pays no dividends. Tesla tanked 5 percent yesterday while Amazon lost 2.56 percent. Other Big Tech losers were Apple, down 3.93 percent; Microsoft, down 2.91 percent; and a whopping smackdown of Adobe, which shed 10.19 percent. Notably, Adobe also doesn’t pay a dividend and trades at a trailing P/E of 54. The … Continue reading →

By Pam Martens and Russ Martens: December 16, 2021 ~ The Federal Deposit Insurance Corporation (FDIC) is the agency that prevents financial panics from turning into catastrophic runs on banks by providing taxpayer-backstopped and government guaranteed insurance on deposits, up to $250,000 per depositor. Its leadership and honest governance is thus critically important to every American. So when a nasty public brawl breaks out between the Board of Directors of the FDIC and its Chairwoman, Jelena McWilliams, every American needs to sit up and pay attention. On Tuesday, Rohit Chopra, President Biden’s nominee who has been confirmed to lead the Consumer Financial Protection Bureau (CFPB), which automatically makes him a member of the Board of Directors of the FDIC, posted at the CFPB’s website serious charges against FDIC Chairwoman McWilliams – effectively stating that she was staging a one-woman coup against her Board and usurping their power to govern the FDIC. … Continue reading →

By Pam Martens and Russ Martens: December 15, 2021 ~ The Senate Banking Committee held a hearing yesterday titled “Stablecoins: How Do They Work, How Are They Used, and What Are Their Risks?” Senator Sherrod Brown (D-OH), the Chair of the Committee, set the tone for the hearing by including the following poignant remarks in his opening statement: “Last month, I wrote to some of the biggest stablecoin issuers to get more information on how they manage their funds that back their coins, and to ask what rights their users have. Their responses were not particularly enlightening – and should lead us to assume most ordinary customers don’t have much in the way of rights at all. “So let’s be clear about one thing: if you put your money in stablecoins, there’s no guarantee you’re going to get it back. They call it a currency, implying it’s the same as having … Continue reading →

By Pam Martens and Russ Martens: December 14, 2021 ~ FINRA is Wall Street’s self-regulator. Last Tuesday afternoon, December 7, we attempted to access the part of its website that houses data on Wall Street’s Dark Pools. The web page was there but the data wouldn’t open. We contacted FINRA via email and asked what the problem was. We were told that it was “a result of today’s Amazon Web Services issue.” Our problem at FINRA’s website was just the tip of the iceberg last Tuesday. As a result of problems at Amazon Web Services (AWS), Amazon’s cloud-service network, customers couldn’t get through to Delta Air Lines on its AWS-supported phone lines; the Associated Press was limited in what it could publish for much of the day; Barron’s reported it was negatively impacted; apps for McDonald’s and Ticketmaster and streaming services from Disney and Netflix were also knocked offline. Amazon delivery … Continue reading →