Here’s How the Fake Unemployment Number Was Created to Subdue Anger Against Wall Street

By Pam Martens and Russ Martens: January 17, 2020 ~ On February 3, 2015, Jim Clifton, the Chairman and CEO of the iconic 85-year old polling company, Gallup, penned an article for his company in which he called the reported unemployment number issued by the U.S. Government “The Big Lie.” Wall Street On Parade has now discovered that a speech by former Fed Chairman Ben Bernanke and a statement made by the current Fed Chairman Jerome (Jay) Powell,  support the view that today’s reported unemployment rate of 3.5 percent is statistically impossible based on a long-held economic model known as “Okun’s Law.” Named after economist Arthur Okun, the economic law works like this according to a speech given by the Fed Chair Ben Bernanke in March 2012: “Okun noted that, because of ongoing increases in the size of the labor force and in the level of productivity, real GDP growth … Continue reading

New York Fed Considering Becoming Sugar Daddy to Hedge Funds as their Distress Grows

John Williams, President of the Federal Reserve Bank of New York

By Pam Martens and Russ Martens: January 16, 2020 ~ It’s apparently not enough of a billionaire subsidy for the U.S. Treasury’s Internal Revenue Service to give a monster tax break to hedge fund titans by allowing them to pay Federal taxes on the basis of “carried interest,” meaning that they have a special loophole to pay a lower tax rate than many school teachers, nurses and plumbers. Now, according to an article in the Wall Street Journal, the Federal Reserve is actually considering opening its super-cheap repo loan money spigot to hedge funds. It doesn’t get any crazier than this. Morphing from a central bank mandated to set monetary policy on the basis of maximum employment and stable prices, to the lender-of-last-resort to the criminally-charged trading houses on Wall Street and now, potentially, to the insider-trading/Big Short hedge funds, the New York Fed has totally lost its way if … Continue reading

JPMorgan’s Historic Earnings Confirm that Fed Loans Are Subsidizing Profits on Wall Street

Jamie Dimon Sits in Front of Trading Monitor in his Office (Source -- 60 Minutes Interview, November 10, 2019)

By Pam Martens and Russ Martens: January 15, 2020 ~ The New York Fed is back to subsidizing billions of dollars in profits at Wall Street’s trading houses, just as it did during the financial crisis. Yesterday, JPMorgan Chase reported that its profits for the quarter ending December 31, 2019 hit an all-time record. (The bank has been around for more than a century, so that’s saying something.) The quarterly profits were $8.52 billion – for the same three-month period in which the New York Fed has been flooding unnamed Wall Street trading houses with hundreds of billions of dollars each week in super cheap loans. The so-called “repo loans” by the New York Fed are being made at a fraction of where the free market would price loans to these Wall Street trading houses. On September 17, 2019, the first day the Fed began this open money spigot to … Continue reading

Has President Trump Become the Pied Piper of Wall Street Along with the New York Fed?

Donald Trump -- Pied Piper to Wall Street (Thumbnail)

By Pam Martens and Russ Martens: January 14, 2020 ~ Donald Trump continues to go out of his way to tie his reelection chances to the stock market setting new highs by perpetually taking credit for its gains on his Twitter page. No other sitting U.S. president in history has done that because they have all been aware of how fast trends can change in the stock market. In fact, we recall a previous Republican President, George W. Bush, being dismissive of the stock market, saying “they run it up and they run it down,” or words to that effect. (On Wall Street that’s known as a bull raid and a bear raid.) On January 9 President Trump delivered the message below on his Twitter page, mistakenly referring to a 401(K) as a 409K. The implication is that Trump has rallied the stock market by 70 to 90 percent and … Continue reading

Are the Fed’s Repo Loans Being Repaid by Wall Street’s Trading Houses or Just Rolled Over and Over?

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

By Pam Martens and Russ Martens: January 13, 2020 ~  Last Friday, the usually reliable and fact-intensive financial website, Wolf Street, threw a hissy fit over how the Wall Street Journal (and by extension, Wall Street On Parade) is reporting the tallies for the repo loans that the New York Fed has been pumping out every business day since September 17, 2019 to the trading houses on Wall Street. The inflammatory headline blared: “The Wall Street Journal (and Other Media) Should Stop Lying About Repos.” The author of the piece, Wolf Richter, explained his criticism as follows: “Here is the ‘in’ of a repurchase agreement [repo loan]: The Fed buys securities (mostly Treasury securities and some agency mortgage-backed securities) in exchange for cash. This adds liquidity to the market. “Here is the ‘out’ of a repurchase agreement: Every repo matures on a set date when the counterparties are obligated to buy the … Continue reading

Both Boeing and the New York Fed Have Been Hiding Dangerous Truths from the American People

By Pam Martens and Russ Martens: January 10, 2020 ~  The design of the Boeing 737 Max and the Wall Street banking system are both dangerously flawed. The 737 Max has been grounded for almost 10 months following two airline crashes that killed 346 people. The Wall Street banking system, which crashed in 2008 and spread its wreckage into the lives of millions of Americans with job losses, home foreclosures, and trillions of dollars in lost savings is still being allowed to operate on a wing and a prayer. In the case of the Boeing 737 Max, Congress did not know beforehand that dangerous problems existed. In the case of the Wall Street banking system, Congress has had repeated warnings since 2012 of systemic dangers that it has simply chosen to ignore under heavy Wall Street lobbying pressure and the allure of tens of millions of dollars in political campaign … Continue reading

World Bank Releases Bleak Outlook for U.S. Growth this Year through 2022

U.S. Activity Indicators (Thumbnail)

By Pam Martens and Russ Martens: January 9, 2020 ~ Yesterday the World Bank released a report forecasting a decidedly bleak outlook for GDP growth in advanced economies. The U.S. is expected to grow at just 1.8 percent this year and a further drop to 1.7 percent in 2021 and 2022. That forecast throws extremely cold water on what Donald Trump promised just two years ago. On December 6, 2017 President Donald Trump stated at a news conference that his giant corporate tax cut (which Congress ended up passing later that same month) could boost GDP growth to “4, 5 and even 6 percent.” (See video clip below.) In 2018, U.S. GDP registered 2.9 percent and GDP growth for 2019 is expected to drop to approximately 2.2 percent, according to the Federal Reserve’s latest forecast. Thus, a tax cut that has spiraled the United States’ national debt to over $23 … Continue reading

Fed’s Balance Sheet Explodes by $413 Billion in 119 Days

JPMorgan Chase Building

By Pam Martens and Russ Martens: January 8, 2020 ~ On September 4, 2019, the assets on the balance sheet of the Federal Reserve stood at $3.761 trillion. As of January 1, that figure is $4,173,626,000,000. That’s an increase of $413 billion in just the past 119 days and the Fed does not seem inclined to turn off its money spigot to Wall Street anytime soon. At the rate the Fed is now going, its balance sheet is likely to eclipse the $4.5 trillion all-time high it reached in 2015 as a result of the unprecedented sums it funneled to Wall Street following the epic financial crash in 2008 and its three rounds of quantitative easing (QE) to keep interest rates low to appease Wall Street’s trading houses and their trillions of dollars in interest-rate derivative bets. When Jamie Dimon, Chairman and CEO of JPMorgan Chase, testified to the Senate … Continue reading

Stock Exposure Has Exploded at JPMorgan’s Federally-Insured Bank to $2.4 Trillion

Jamie Dimon, Chairman and CEO of JPMorgan Chase, Has Survived a Raft of Criminal Charges Against His Bank

By Pam Martens and Russ Martens: January 7, 2020 ~ Federally-insured banks are not supposed to be making large speculations in the stock market. They are supposed to be using bank deposits to make loans to worthy businesses and consumers to help grow the U.S. economy and keep the United States competitive on the global stage. But according to the official reports from the federal regulator of national banks, the Office of the Comptroller of the Currency (OCC), since December 31, 2010 the federally-insured bank owned by the monster trading house of JPMorgan Chase (JPMorgan Chase Bank NA) has increased its equity (stock) derivative bets from $337 billion to $2.4 trillion as of its latest report for the quarter ending September 30, 2019. (The data is found in a graph titled “Table 10” in the appendix of each of the quarterly reports published by the OCC.)  During the period that … Continue reading

Federal Reserve Admits It Pumped More than $6 Trillion to Wall Street in Recent Six Week Period

New York Fed Headquarters Building in Lower Manhattan

By Pam Martens and Russ Martens: January 6, 2020 ~ If the Federal Reserve was looking for a media lockdown on news about the trillions of dollars in cumulative repo loans it has funneled quietly to Wall Street’s trading houses since September 17 of last year, it could not have found a better cloud cover than Donald Trump. First the impeachment proceedings bumped the Fed’s money spigot from newspaper headlines. Then, this past Friday, as the Fed released its December meeting minutes at 2:00 p.m., with its highly anticipated plans to be announced for the future of this vast money giveaway to Wall Street, that news was ignored as the media scrambled to cover Trump’s “termination” of General Qasem Soleimani, the head of Iran’s Quds Force, which raised the immediate specter of a retaliatory strike against the U.S. by Iran. The Fed’s minutes revealed that after multiple expansions of this … Continue reading

The Doomsday Machine Returns: Citibank Has Sold Protection on $858 Billion of Credit Default Swaps

Margot Robbie

By Pam Martens and Russ Martens: January 3, 2020 ~ Lily Tomlin is credited with the quote: “No matter how cynical you get, it is impossible to keep up.” Wall Street regularly brings that message home. According to the latest derivatives report from the Office of the Comptroller of the Currency (OCC), Citibank, the federally-insured, taxpayer-backstopped bank owned by Citigroup, has sold protection to other banks, hedge funds, insurance companies or corporations on a staggering $858 billion of Credit Default Swaps. When a federally-insured bank sells protection to others on Credit Default Swaps, it is effectively taking on the risk of a default event. At a time of unprecedented levels of debt in the system and growing warnings about leveraged loans, that seems like a very unwise move by Citigroup. The OCC notes that Citibank has bought protection via a larger amount of Credit Default Swaps – a total of … Continue reading

Why Is Wall Street the Only Industry in America With Access to the Fed’s Endless Money Machine?

John Williams, President of the Federal Reserve Bank of New York

By Pam Martens and Russ Martens: January 2, 2020 ~ Consumers represent two-thirds of GDP in the United States. And yet, when consumers run into trouble, they don’t get a handout from the Federal Reserve – they are forced to file bankruptcy. There are no Fed handouts to small business owners, farmers, or main street merchants either. So why is it exactly that the trading houses on Wall Street, with a serial history of crimes and with the most overpaid and under-punished executives on the planet, are able to perpetually have secret communications with the New York Fed and magically turn on the flow of trillions of dollars of ridiculously cheap loans to bail out their hubris and corruption. The obscene money spigot from the New York Fed to Wall Street’s trading houses didn’t start with the epic financial crisis of 2008, as most Americans believe. It started following the … Continue reading

These Charts Show Why the Fed Is Still in a Panic Over the Repo Loan Market

Derivatives Thumbnail

By Pam Martens and Russ Martens: December 31, 2019 ~ After the epic financial crash on Wall Street in 2008 – the worst since the 1929 crash and ensuing Great Depression – two key reforms were put in place in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 to prevent another catastrophic meltdown on Wall Street. The first key reform was that derivatives were to be moved out of the federally-insured, taxpayer backstopped commercial banks, that had been bought up by Wall Street trading houses, into units that could be wound down in a bankruptcy proceeding. It was called the “Push Out” rule. That reform was also meant to prevent the New York Fed from ever again secretly pumping upwards of $29 trillion into Wall Street trading houses and their derivative counterparties in order to bail out a corrupt casino banking system. (And yet here we are … Continue reading

Congress Just Passed Nightmare Legislation that Strips Trillions in Wealth from the Middle Class

Piggy Bank Thumbnail

By Pam Martens and Russ Martens: December 30, 2019 ~ Five days before Christmas, while the impeachment debate distracted voters, the President signed into law the so-called Secure Act – which was a sickening bi-partisan attack on the wealth-building capability of the middle class. Making the dirty deed even more Grinch-worthy, the attack on the assets of the middle class comes after the Trump tax overhaul in 2017 gave a windfall to the super wealthy by doubling their estate tax exclusion from $11 million per couple to $22 million. Now someone has to pay for that and both Democrats and Republicans in Congress have stealthily decided it’s going to be Millennials – who are already buried under student loan debt with a meager average net worth of $8,000. The only people that will gain security from the Secure Act are the Wall Street wealth advisors who are already looting two-thirds … Continue reading

The Fed Has Made Jamie Dimon $250 Million Richer Through Its Repo Loans

Jamie Dimon, Chairman and CEO of JPMorgan Chase

By Pam Martens and Russ Martens: December 27, 2019 ~ As Wall Street On Parade has previously reported, JPMorgan Chase has been fingered as the bank that contributed to the Federal Reserve having to intervene in the overnight loan market on September 17 of this year, and every business day since then. The Fed, through its money spigot, the New York Fed, has flooded Wall Street’s trading houses with hundreds of billions of dollars weekly in cheap loans over the past three months. That cheap, pre-announced source of liquidity has not only caused the stock market to set multiple new historic highs but has caused the stock of JPMorgan Chase to set multiple new historic highs as well. Jamie Dimon is the Chairman and CEO of JPMorgan Chase. Dimon admitted on his quarterly earnings call with analysts that his bank had backed away from lending on September 17. That backing … Continue reading

Goldman Sachs Federally-Insured Bank Loses $1.2 Billion in Interest Rate Derivative Bets

David Solomon, Chairman and CEO, Goldman Sachs

By Pam Martens and Russ Martens: December 26, 2019 ~ A week before Christmas when Americans were focused on either the impeachment proceedings or holiday preparations, the Office of the Comptroller of the Currency (OCC) quietly released its quarterly report on the trading and derivative activities of Wall Street’s casino banks. It contained a humdinger in, literally, red ink. The report showed that Goldman Sachs Bank USA, which is, insanely, a federally-insured bank backstopped by the U.S. taxpayer that is part of the Goldman trading colossus, had lost $1.24 billion trading interest rate derivatives during the third quarter of this year. According to the Federal Deposit Insurance Corporation, the bank only holds $149.8 billion in deposits while the OCC reports it has $49 trillion in notional derivatives (face amount). (See Table 7 in the Appendix at this link.) Profits in other derivative trading areas, like the $1.14 billion Goldman Sachs … Continue reading

Trump and the Stock Market Are the Winners in the Fed’s Repo Loan Binge; Here Are the Losers

By Pam Martens and Russ Martens: December 23, 2019 ~ The S&P 500 Index and the Dow Jones Industrial Average set new record highs every single day last week. This occurred despite the Federal Reserve justifying its unprecedented hundreds of billions of dollars each week in cheap loans to Wall Street’s trading houses as necessary to stem a “liquidity” crisis. You can’t have a liquidity crisis when the stock market is setting record highs for an entire week. Those two things just don’t correlate. The Fed, through its money spigot, the New York Fed, began sluicing these funds to Wall Street on September 17, the day the overnight borrowing rate in the repurchase agreement (repo) loan market spiked from 2 percent to 10 percent. This was the first such intervention by the Fed since the financial crisis. The repo market is where banks, hedge funds and money market funds loan … Continue reading

JPMorgan and Goldman, Under Criminal Probes, Close in the Red Despite Trading their Own Bank Stocks in their Own Dark Pools

Goldman Sachs and JPMorgan Chase Logos

By Pam Martens and Russ Martens: December 20, 2019 ~ All three major stock indices set new highs yesterday. The Nasdaq led with a 0.67 percent gain; the Dow Jones Industrial Averaged closed with a 0.49 percent increase while the S&P 500 inched up 0.45 percent. Stocks have been setting new highs all week as the New York Fed funnels tens of billions of dollars each day to Wall Street’s trading houses to quench a “liquidity” crisis whose existence has seemed to escape stock trading desks on Wall Street. The stock markets’ week of new highs comes at a curious time. For only the third time in history, a sitting U.S. President was impeached this past week by the U.S. House of Representatives and the Democratic candidates for President wasted no time in last night’s debate drilling down to why this happened. The words “corrupt” and “corruption” were used repeatedly … Continue reading

New York Fed’s Fake Borrowing Rates Raise Ghosts of Libor’s Fake Rates

Occupy Wall Street Protesters Outside the New York Fed (Thumbnail)

By Pam Martens and Russ Martens: December 19, 2019 ~  When it comes to Wall Street’s mindset, the thinking is that it’s legal if you can get away with it. That mindset seems to have captured the Federal Reserve Bank of New York which secretly pumped trillions of dollars into insolvent banks in violation of its statutory mandate during the financial crisis; is alleged to have fired a bank examiner for refusing to alter her negative examination of Goldman Sachs; and failed to investigate a litany of crimes to which it was made aware. (See U.S. Senate Tries Public Shaming of New York Fed President Dudley.) One of the crimes that the New York Fed failed to bring to the attention of U.S. law enforcement was mega banks cheating on the borrowing rates that they were reporting as their London InterBank Offered Rate or Libor, a benchmark interest rate used … Continue reading

The New York Fed Is Keeping JPMorgan’s Secrets Close to Its Chest

John Williams, President of the Federal Reserve Bank of New York

By Pam Martens and Russ Martens: December 18, 2019 ~ The Federal Reserve Bank of New York (New York Fed) seems intent on stonewalling Wall Street On Parade from receiving some very basic information on JPMorgan Chase’s rapid drawdown this year on its liquid reserves at the New York Fed – a matter which some on Wall Street have fingered as a contributing cause of the ongoing repo loan crisis. More on that in a moment, but first some background. For the past decade Wall Street On Parade has been keeping close tabs on the crony operations of the New York Fed. (See related articles below.) The New York Fed has effectively morphed into a key cog in Wall Street’s wealth transfer system – where the little guy’s pocket is picked daily in the service of minting billionaires on Wall Street – who now increasingly want to rule the rest … Continue reading

The Fed Fueled Today’s Liquidity Crisis with One Key Moral Hazard Action

Alan Greenspan

By Pam Martens and Russ Martens: December 17, 2019 ~ The Federal Reserve Bank of New York (New York Fed) made the astonishing announcement last Thursday that it will be pumping a cumulative $2.93 trillion into Wall Street trading houses (primary dealers) between December 16 and January 14. That’s on top of the $360 billion of liquidity it is pumping into the markets by buying back $60 billion a month in Treasury bills from its primary dealers. The Fed’s excuse for opening its self-created money spigots to the tune of trillions of dollars to Wall Street’s trading houses – a replay of what it did secretly during the financial crisis of 2007 to 2010 – is that this is simply a technical fix for allowing bank reserves at the Fed to shrink too far. But that is merely a symptom – not the actual disease afflicting the U.S. financial system. … Continue reading

New York Fed Plans to Throw $2.93 Trillion at Wall Street’s Trading Houses Over Next Month as New York Times Remains Silent

New York Fed Headquarters Building in Lower Manhattan

By Pam Martens and Russ Martens: December 16, 2019 ~ One has to wonder how much money it would take for the New York Fed to throw at Wall Street before the New York Times reports to its readers on the biggest Wall Street bailout by the Fed since the financial crisis. Last Thursday, December 12, the New York Fed announced that over the next month it would shower the trading houses (primary dealers) on Wall Street with a total of $2.93 trillion in short-term loans. The money is for a Wall Street liquidity crisis that has yet to be explained in credible terms to the American people and yet the New York Times does not appear to have an investigative reporter assigned to investigate what’s really going on just 11 years after those same trading houses blew themselves up in the biggest financial crash since the Great Depression and … Continue reading

Senators Give Explosive Critique of Wall Street’s Top Cop as Mainstream Media Yawns

SEC Chair Jay Clayton

By Pam Martens and Russ Martens: December 11, 2019 ~ It’s becoming clear that the reason so many Americans have their pockets picked by Wall Street scam artists year after year is that mainstream media simply won’t put the dangers of dealing with the mega Wall Street banks on their front pages. Yesterday’s Senate Banking hearing is yet one more example of mainstream media failing the interests of the American people. At yesterday’s hearing, Senator after Senator probed the Chairman of the Securities and Exchange Commission, Jay Clayton, on what were clearly intentional failings to hold Wall Street accountable. The scathing rebukes of the SEC came from both Republican and Democrats on the Senate panel. But you will find no reports about that hearing on the front pages of newspapers today — or in any section of leading newspapers. Particularly harsh in their appraisal of Clayton’s rein at the SEC … Continue reading

Congress Held a Hearing on the Fed’s Bailout of the Repo Market: Here’s Why You Haven’t Heard About It

U.S. Treasury Secretary Steve Mnuchin

By Pam Martens and Russ Martens: December 10, 2019 ~ Last Thursday, U.S. Treasury Secretary Steve Mnuchin was the sole witness called before the House Financial Services Committee to answer questions on the state of financial stability in the U.S. Under the Dodd-Frank financial reform legislation of 2010, the U.S. Treasury Secretary also heads the Financial Stability Oversight Council (F-SOC) which is charged with monitoring any threats to the stability of the U.S. financial system in order to prevent a replay of the epic financial crash of 2008 and attendant devastation to the U.S. economy. During the hearing, Mnuchin was grilled time and again by numerous Republicans and Democrats on what is necessitating the Federal Reserve Bank of New York (New York Fed) to be pumping out hundreds of billions of dollars per week to Wall Street trading houses via the repurchase agreement (repo loan) market. But instead of reporting … Continue reading

BIS Drops a Bombshell: Four U.S. Mega Banks Are Core of Repo Loan Crisis

Five U.S. Mega Banks Are Highly Interconnected

By Pam Martens and Russ Martens: December 9, 2019  Yesterday, the Bank for International Settlements (BIS) dropped a bombshell report that torpedoed the Federal Reserve’s official narrative on what has caused the overnight lending market (repo loan market) on Wall Street to seize up since September 17, leading to more than $3 trillion in cumulative loans from the New York Fed as lender of last resort. The Federal Reserve has said the repo crisis was a result of corporations draining liquidity from the system to pay their quarterly tax payments alongside a large auction of U.S. Treasury securities settling and adding to the cash drain. That excuse was clearly bogus since the Fed has provided hundreds of billions of dollars weekly into the repo market since September 17, while stating that it plans to continue this activity into next year. The BIS report dropped the bombshell that the “US repo … Continue reading