Search Results for: repo market bailout

By Pam Martens and Russ Martens: July 7, 2022 ~ The Office of Financial Research (OFR), a unit of the U.S. Treasury Department, was created under the Dodd-Frank financial reform legislation of 2010. Its job is to prevent, through early warnings, the kind of catastrophic financial crisis that occurred in 2008 when irresponsible and corrupt practices on Wall Street toppled the U.S. economy; brought on the deepest financial crisis since the Great Depression; and left the taxpayer and Fed bailing out the Wall Street megabanks that would have otherwise collapsed from their own hubris. Unfortunately, the OFR was savagely gutted under the Trump administration. Today, OFR is like the cop on the beat that has been stripped of his whistle, his walkie-talkie and is wearing dark sun glasses on a cloudy day. One of the tools that the OFR is supposed to use to warn federal regulators that Wall Street is … Continue reading →

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 →

By Pam Martens and Russ Martens: April 30, 2024 ~ The Office of Financial Research (OFR), the federal agency created after the financial crash of 2008 to keep federal banking regulators on top of threats to financial stability, has posted an interactive chart showing the largest managers of Money Market Mutual Funds in the U.S. Alarmingly, the parent of the largest and riskiest bank in the United States – JPMorgan Chase – is also the second largest Money Market Mutual Fund manager. According to the OFR, as of March 31, 2024, JPMorgan was managing $657.9 billion in money market funds, second only to Fidelity, which on the same date was managing $1.3 trillion in money market funds. The data comes from Securities and Exchange Commission Form N-MFP2. JPMorgan’s federal regulators have failed to stem the bank’s growth despite the fact that JPMorgan Chase has been tapping massive bailouts from the Federal … Continue reading →

By Pam Martens and Russ Martens: April 17, 2024 ~ According to Federal Reserve data, for the first time in its history, the Fed has been losing money on a consistent basis since September 28, 2022. As of the last reporting date of April 10, those losses came to a cumulative $162.9 billion. As the chart above from the Fed indicates, the monthly losses thus far in 2024 have ranged from a high of $13.4 billion in January to $5.5 billion in March. We are not talking about unrealized losses on the debt securities the Fed holds on its balance sheet, which it acquired under its various Quantitative Easing programs. (The Fed does not mark to market the gains or losses on those securities on the basis that it plans to hold them to maturity.) We’re talking about real cash operating losses the Fed is experiencing from earning approximately 2 percent interest on … Continue reading →

By Pam Martens and Russ Martens: March 28, 2024 ~ Yesterday, American Banker released a report showing that five banks in the U.S. hold a combined half trillion dollars in commercial real estate (CRE) loans. It came as a big surprise to a lot of folks that the bank holding the largest amount of CRE loans is JPMorgan Chase – whose bank holding company is also exposed to $49 trillion in derivatives as of December 31, 2023 according to the Office of the Comptroller of the Currency. (See Table 14 at this link.) JPMorgan Chase is already considered the riskiest bank in the U.S. according to its regulators. American Banker reported the following CRE totals for the five banks: JPMorgan Chase, $173 billion; Wells Fargo, $139.65 billion; Bank of America, $82.8 billion; U.S. Bank, $55.66 billion; and PNC Bank, $48.89 billion. Some of the same hubris and willful blindness that prevailed in … Continue reading →

By Pam Martens and Russ Martens: March 27, 2024 ~ Yesterday, billionaire Larry Fink, Chairman and CEO of the giant investment manager BlackRock, released his annual letter to shareholders. In it, Fink revives the same ole trope that billionaires Kenneth Langone and Stanley Druckenmiller were taking on a road show in 2013. Back then the billionaire propaganda was called: “Generational Theft: How Entitlement Spending is Stealing Opportunity from America’s Youth.” Every time there is talk of raising taxes on the super-rich, some of whom pay less in taxes than plumbers and teachers through a tricked-up tax dodge known as “carried interest,” the billionaires launch a concerted effort to scapegoat struggling seniors living on an average monthly Social Security retirement benefit of $1772.51. The inability of younger Americans to save enough for retirement couldn’t possibly have anything to do with Wall Street gobbling up two-thirds of lifetime retirement savings in fees, as Frontline … Continue reading →

By Pam Martens and Russ Martens: March 4, 2024 ~ The widely respected banking and Wall Street watchdog, Better Markets, has a new report out on the latest teetering bank holding company, New York Community Bancorp (ticker NYCB). The title of the well-researched report pretty much says it all: “A Frankenstein Monster Federal Regulators Created.” NYCB has lost 65 percent of its stock market value year-to-date and was downgraded to a junk credit rating by Moody’s after the stock market closed on February 6. Moody’s wrote in its downgrade that a third of the bank’s deposits lack FDIC insurance. NYCB’s rapid share price descent began on January 31 when the bank filed an 8K form with the SEC indicating a $260 million net income loss in the fourth quarter; a dividend cut from 17 cents to 5 cents; and a $552 million provision for credit losses on commercial real estate – an area of … Continue reading →

By Pam Martens and Russ Martens: December 20, 2023 ~ Jerome Powell became the Chairman of the Federal Reserve on February 5, 2018 after being nominated by then President Donald Trump and passing his Senate confirmation. Powell was sworn in again on May 23, 2022 for a second term as Chair. His second term runs until May 15, 2026.  Unlike most Fed Chairs, Powell has no economics degree. He has a law degree from Georgetown University. For more background on Powell, see our May 18, 2020 article: The Fed’s Chair and Vice Chair Got Rich at Carlyle Group, a Private Equity Fund with a String of Bankruptcies and Job Losses. Powell’s tenure as Fed Chair has been mired by the biggest trading scandal in the Federal Reserve’s 110-year history. That scandal has yet to be resolved in a manner that meets the test of accountability. See our October report: After Two Years, … Continue reading →

By Pam Martens and Russ Martens: December 14, 2023 ~ Quietly, on December 1, the New York Fed published the following statement on its website: “The Norinchukin Bank, New York Branch, has been added to the list of Standing Repo Facility Counterparties, effective December 1, 2023.” The Standing Repo Facility (SRF) is a permanent $500 billion bailout facility created by the Federal Reserve and operated by the New York Fed – the private regional Fed bank where multi-trillion dollar Wall Street bank bailouts have become a regular feature of its operations. Without any action from the U.S. legislative branch (otherwise known as Congress), the Fed has unilaterally decided to become lender of last resort to Wall Street trading houses (whom the Fed prefers to call its “primary dealers”) and deposit-taking banks, including the uninsured New York branches of foreign banks like Norinchukin Bank. If you have never heard of Norinchukin Bank, … Continue reading →

By Pam Martens and Russ Martens: December 12, 2023 ~ There is a battle raging between the Wall Street mega banks and their federal banking regulators. The regulators want the mega banks to hold more capital against their high risk trading positions to prevent a replay of the bailouts in 2008 and repo bailouts in the fall of 2019. The mega banks have launched a deceptive ad campaign and public relations battle to thwart that from happening. The federal regulators’ efforts to raise capital are being undermined by Fed Chairman Jay Powell’s perpetual testimony to Congress that the U.S. banking system is safe and sound and adequately capitalized. Thus far, no member of Congress has thought to question Fed Chair Powell during public hearings as to why the Fed needs a new permanent bailout facility of $500 billion, on top of its century-old Discount Window, if the banking system is adequately … Continue reading →