By Pam Martens and Russ Martens: June 21, 2021 ~ One thing is for sure. When the current stock market bubble does eventually crash, Federal Reserve Chairman Jerome Powell is not going to be able to sit before Congress and tell lawmakers that nobody could have seen it coming. Wall Street veterans have gone on record repeatedly in recent months to warn of a coming crash. Last week Michael Burry, who heads the hedge fund Scion Asset Management and was immortalized in “The Big Short” movie for making a fortune shorting subprime debt before it collapsed in the 2008 crash, took to Twitter with the latest of these warnings. (The Tweets were subsequently deleted after they were heavily publicized in the business media and retweeted.) On Tuesday, Burry Tweeted this: “People always ask me what is going on in the markets. It is simple. Greatest Speculative Bubble of All Time in … Continue reading →

By Pam Martens and Russ Martens: June 18, 2021 ~ Apparently, the mega banks on Wall Street thought that the Fed was never going to take away the punch bowl. And now the Fed has indicated that it’s thinking about thinking about doing just that. By taking away the punch bowl we mean trimming back its $80 billion in monthly purchases of Treasury securities and $40 billion in agency Mortgage-Backed Securities. And, at some point, actually starting to hike interest rates again. Fed Chair Jerome Powel made clear during his press conference on Wednesday that trimming the $120 billion in bond purchases monthly is now very much part of the FOMC discussions. Powell said this in answer to a question about when that trimming might start: “So I expect that we’ll be able to say more about timing as we see more data. Basically, there’s not a lot of more light … Continue reading →

By Pam Martens and Russ Martens: June 18, 2021 ~ How embarrassing it must be for Jerome Powell, Chairman of the Federal Reserve, that three of the largest banks in the U.S. that are supervised by the Fed, have been deemed not trustworthy enough by the European Commission that they were banned from participating in this week’s historic European Union bond offering. It is also egg on the face of the U.S. Department of Justice, which has been handing out deferred prosecution agreements to these same banks for felony counts like it’s a meter maid doling out parking tickets. JPMorgan Chase, Citigroup and Bank of America were banned along with seven non-U.S. banks from participating in this week’s European Union bond offering. The syndicated offering is part of what will grow over the next five years to be a $969 billion COVID-19 recovery fund for the European Union, part of the plan … Continue reading →

By Pam Martens and Russ Martens: June 17, 2021 ~ Wells Fargo bank analyst Mike Mayo appeared on CNBC this morning to paint a rosy picture for how banks would be treating the Fed’s less than dovish statement yesterday. Mayo said this about the banks: “Back in the 70s or even 1994 the inflation caused unrealized securities losses, derivatives losses, asset/liabilities mismatches. So too much inflation is hell for banks. But we think what’s happening now is a dose of heaven. And so higher rates sooner can allow banks to finally earn more money on all those deposits that they’ve gathered. And so this means that assets reprice faster than their liabilities.” What actually priced much faster than either assets or liabilities were the share prices of the mega banks on Wall Street. The cheery words had barely left Mayo’s tongue before the biggest banks on Wall Street went into a … Continue reading →

By Pam Martens and Russ Martens: June 17, 2021 ~ On May 26 Bloomberg News reported that the U.S. Department of Justice had opened an investigation into Archegos Capital Management and its bank lenders. Archegos is the family office hedge fund that had blown up in late March, causing a total of more than $10 billion in losses to mega banks including Credit Suisse, UBS, Morgan Stanley and others. Archegos had obtained leverage of as much as 85 percent on its heavily-concentrated stock trades from some of its banks, in brazen violation of the Federal Reserve’s Regulation T which sets margin for stock trading at a maximum of 50 percent on opening trades. In addition, the banks were holding the stocks in their own names (while shifting losses and gains to Archegos under a derivatives contract called a swap) thus denying the public the knowledge of the true owners of these … Continue reading →

By Pam Martens and Russ Martens: June 16, 2021 ~ Corporate media outlets like Bloomberg News, the CBS news program 60 Minutes, and CNBC have been seduced into obsequious behavior when it comes to Jamie Dimon, the Chairman and CEO of JPMorgan Chase, despite the fact that Dimon has presided over the most unparalleled crime spree in the history of U.S. banking. Between 2014 and September of last year, JPMorgan Chase has been charged with five criminal felony counts by the U.S. Department of Justice. The bank admitted to all five counts. (See the bank’s detailed rap sheet here.) Despite this crime spree and endless probation periods followed by more crime, Dimon has further seduced federal bank regulators into allowing his unrepentant behemoth to become the most systemically risky bank in America. That assessment is not our opinion. It is the assessment of the federal government based on hard data. The … Continue reading →

By Pam Martens and Russ Martens: June 15, 2021 ~ Jeff Bezos, the founder and man at the helm of Amazon for the past 27 years, announced last month that he will be stepping down as CEO on July 5. Fifteen days later, according to Bezos, he and his brother Mark will take off on the first crewed space flight from his rocket company, Blue Origin. (Another seat on the flight has been auctioned online for $28 million. The winner has not yet been named.) Following on the heels of Bezos’ 2019 announcement of his divorce to his wife of a quarter of a century, MacKenzie Bezos, and tabloid headlines over his accusations of attempted extortion and blackmail by the National Inquirer over Bezos salacious texts to his girlfriend, shareholders were likely becoming eager for Bezos to hop aboard that spacecraft. What shareholders were apparently not thinking about was what was going … Continue reading →

By Pam Martens and Russ Martens: June 14, 2021 ~ Last Tuesday, June 8, at 4:59 a.m. EDT, the public interest news outlet, ProPublica, dropped a bombshell. A source unknown to it had leaked “a vast trove of IRS data on the tax returns of thousands” of the richest Americans, including the top 25 billionaires in the country as of 2018. The data covered numerous years of tax filings and showed that some of the most well known billionaires in the U.S. had paid no income taxes in some years. Carefully reading through the ProPublica material, a few critical details emerge. First, ProPublica does not appear to have tax return data for years later than 2018. Since it’s now June of 2021, that suggests that someone in the Trump administration might have downloaded this data to a thumb drive and waited until recently to leak it. ProPublica acknowledges that it’s had … Continue reading →

By Pam Martens and Russ Martens: June 11, 2021 ~ Senator Elizabeth Warren of Massachusetts chairs the Senate Banking Committee’s Subcommittee on Economic Policy. On Wednesday the Subcommittee held a hearing on a topic that is becoming ever more timely with each new Bitcoin extortion attack on an essential U.S. business. The hearing was titled: “Building A Stronger Financial System: Opportunities of a Central Bank Digital Currency.” To set the stage for the need for a regulated alternative to the crime network now trafficking in cryptocurrencies, Warren explained all the ways that cryptocurrencies are simply “lousy” for any socially-redeeming purpose. Warren stated: “Cryptocurrencies have turned out to be a fourth-rate alternative to real currency. First, cryptocurrencies are a lousy way to buy and sell things. Unlike the dollar, their value fluctuates wildly depending on the whims of speculative day traders. You know, in just the last two months, the value of … Continue reading →

By Pam Martens and Russ Martens: June 10, 2021 ~ Yesterday, Gary Gensler, Chairman of the Securities and Exchange Commission, delivered a speech at the virtual Piper Sandler Global Exchange and FinTech Conference. Gensler promised to tackle at least some of the tricked-up aspects of the U.S. stock market that have rendered it the envy of organized crime, rather than the envy of the world as Wall Street titans like to delude themselves. If Gensler actually follows through on his promise, he will be doing far more than was done by Obama’s SEC chiefs, Mary Schapiro and Mary Jo White. There is a precise date as to when President Obama and SEC Chair Mary Jo White became overtly aware that the stock market structure had been outrageously rigged. That date is March 30, 2014 when famed author and former Wall Street veteran, Michael Lewis, went on 60 Minutes to proclaim: “The … Continue reading →