Search Results for: size of fed portfolio

More Failed Banks and Office Building Demolitions Likely Before Real Estate Problems End, Warn Two Federal Agencies

By Pam Martens and Russ Martens: March 21, 2024 ~ Federal banking oversight agencies are in agreement: U.S. banks are facing a potential tsunami of problems with commercial real estate loans in the office space sector. Last June 1, the Office of Financial Research (OFR), (the agency created under the Dodd-Frank financial reform legislation of 2010 to warn about financial stability risks), explained why the vacancy rate in office buildings is in dramatic contrast to the actual occupancy rate, and thus bodes poorly for the future demand for renewing office leases. OFR writes as follows: “The health of the CRE [Commercial Real Estate] office sector is not only measured by the amount of space leased and rent paid today, but also by how much space will be required in the future. In addition to space available for sublease, we can estimate the amount of space currently occupied by employees by measuring card … Continue reading

JPMorgan’s Federally-Insured Bank Is Fined $348 Million for Losing Track of “Billions” of Trades

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

By Pam Martens and Russ Martens: March 18, 2024 ~ On Thursday of last week, two of JPMorgan Chase Bank’s federal regulators fined the riskiest bank in the United States $348 million dollars for engaging in “unsafe and unsound banking practices” for failing to supervise “billions” of trades on at least 30 global trading venues. The Office of the Comptroller of the Currency (OCC) fined JPMorgan Chase Bank $250 million while the Federal Reserve fined the bank $98.2 million. The OCC said the misconduct occurred since at least 2019. The Fed said the bank had engaged in the misconduct over the span of nine years, from 2014 to 2023. The key outrage embedded in these charges – that mainstream media failed to point out in its coverage last week – is that this “trading” activity did not occur at the registered brokerage firm of JPMorgan, which has properly licensed traders and trading … Continue reading

FDIC Data Contradicts Fed Chair Powell: Shows Real Estate Problems Have Skyrocketed at Largest U.S. Banks, Not  the Smaller Regionals

Jerome Powell (Thumbnail)

By Pam Martens and Russ Martens: March 11, 2024 ~ On Sunday, February 4, the CBS program 60 Minutes aired a taped interview with Federal Reserve Chairman Jerome Powell. The actual interview had occurred three days earlier and was conducted by 60 Minutes interviewer Scott Pelley. Two noteworthy things happened in connection with that interview: First, CBS did not indicate above the transcript of the interview that Powell’s comments had been materially shortened in the program that aired on TV; secondly, Powell calls the real estate problem at the largest banks “manageable” while shifting the more serious real estate loan problem to “smaller and regional banks.” Below is what Powell had to say about problem real estate loans at U.S. banks in the 60 Minutes’ interview. The bracketed bold text is what is in the transcript but did not air in the broadcasted program on television. (Scroll to 8 minutes and 20 … Continue reading

Wall Street Mega Banks Have Created a Circular Firing Squad with Credit Derivatives and Capital Relief Trades – with the Fed’s Blessing

By Pam Martens and Russ Martens: March 6, 2024 ~ On June 11, 2015, the Office of Financial Research (OFR) released a sobering report on how banks were reducing their requirements to hold adequate capital against potential losses by engaging in non-transparent “capital relief trades” with potentially questionable counterparties. The OFR researchers summarized the problem as follows: “Capital relief transactions may have benefits to banks. But, even if real risk transfer is involved, these transactions can pose financial stability concerns by increasing interconnectedness, transforming credit risk into counterparty risk, and obscuring capital adequacy to investors and counterparties. And while bank supervisors have extensive data about banks, they may have less information about the nonbanks who are selling credit risk to those banks and ultimately bearing the risk of loss.” The Office of Financial Research was created under the Dodd-Frank financial reform legislation of 2010 to make sure that Wall Street mega banks … Continue reading

Federal Agency Study Contradicts Fed Chair: Finds Banking System Is Ripe for Another Crisis and Remains “Fragile and Uncertain”

Jerome Powell (Thumbnail)

By Pam Martens and Russ Martens: January 2, 2024 ~ Following the second, third and fourth largest bank failures in U.S. history in the spring of last year, Federal Reserve Chair Jerome Powell gave his semiannual monetary policy report to the House Financial Services Committee and the Senate Banking Committee in June. During both appearances, Powell stated the same thing: “The U.S. banking system is sound and resilient.”  But according to a report last week from the federal agency whose mandate is to keep federal regulators apprised of the true condition of the U.S. banking system, it is actually ripe for another crisis and its condition is “fragile and uncertain.” The federal agency whose researchers are taking the latter position is the Office of Financial Research (OFR). The agency was created under the Dodd-Frank financial reform legislation of 2010 to prevent another 2008-style financial crisis by providing federal regulators with ongoing analysis and … Continue reading

Watchdog to Fed: JPMorgan Is Controlling Fossil Fuels Empire, Which Just Spilled a Million Gallons of Oil in Gulf of Mexico

By Pam Martens and Russ Martens: November 27, 2023 ~ The formidable Washington watchdog, Public Citizen, has trained its sights on JPMorgan Chase, Jamie Dimon’s house of serial frauds and felony counts that is allowed to also operate as the largest federally-insured bank in the United States. Public Citizen’s pursuit of JPMorgan Chase began in 2019 when its Energy Program Director, Tyson Slocum, began investigating a hodge podge of private equity shell companies using the name Infrastructure Investments Fund (IIF). At the time, IIF was in the process of buying El Paso Electric and Public Citizen smelled something rotten and started digging. Public Citizen concluded that JPMorgan Chase was controlling IIF. Public Citizen then filed a series of complaints in the matter with the Federal Energy Regulatory Commission (FERC). FERC is not a federal agency that JPMorgan Chase should be riling up again. In 2013, FERC fined the bank $410 million … Continue reading

Fed’s Vice Chair for Supervision Says Another Financial Crisis Could Cost U.S. $5 Trillion to $25 Trillion – Potentially as Much as 100 Percent of GDP

Michael Barr

By Pam Martens and Russ Martens: October 12, 2023 ~ On Monday, Michael Barr, the Vice Chair for Supervision at the Federal Reserve, addressed a contentious issue in a speech before the American Bankers Association’s annual convention in Nashville. The topic was why federal banking regulators have proposed higher capital levels for the largest U.S. banks, those with assets over $100 billion. As we reported on September 20, there has been aggressive pushback on the proposal from large banks, their lobbyists and their trade associations. (Community banks are not impacted by the proposal.) During his speech, Barr put a staggering dollar figure on the destruction to the U.S. economy that could materialize from another major financial crisis. Barr said this: “Research suggests the costs of a financial crisis are sizable. While estimates vary widely, the cumulative loss in economic activity is consistently estimated to lie above 20 percent of annual GDP—and in … Continue reading

Casino Banking: Wall Street Mega Banks Traded More in their Federally-Insured Bank than the Total for their Bank Holding Company

By Pam Martens and Russ Martens: October 13, 2022 ~ When something happens for the first time in history at federally-insured banks, Congress and federal regulators need to pull their heads out of the sand and pay attention. We’re talking about the fact that in the second quarter of this year, trading revenues at federally-insured commercial banks eclipsed the trading revenues at bank holding companies – which typically include subsidiaries where traders actually have licenses to trade. This latest data on what is happening inside the nation’s largest federally-insured banks comes from the Office of the Comptroller of the Currency (OCC), see pages 2 and 3 here. The federally-insured banks generated a total of $10.3 billion in trading revenue in the second quarter versus $10.2 billion for the bank holding companies, or 101 percent of the bank holding company revenues. That’s never happened before according to the data provided by the … Continue reading

Nowhere to Hide: The Fed-Induced Bubble in Stocks and Bonds Is Blowing Up; Even the Typical Safe Havens of Gold and T-Notes Are Losing Money

By Pam Martens and Russ Martens: September 25, 2022 ~ The corrupt political backdrop for today’s unprecedented market quagmire feels like a hyperbolic trailer for a low-budget sci-fi thriller: The former president of the only remaining superpower in the world has been charged with “staggering” frauds against banks – the ones he just deregulated as president. (This same former president was also caught red-handed with Top Secret documents after he left public office — but the super power’s 18 intelligence agencies have no idea what he did, or was planning to do, with these documents.) On the other side of the globe, the sitting president of a bygone superpower is engaging in nuclear saber-rattling and conscripting 60-year-old men to fight an illegal war while young, able-bodied men flee the country en masse. The world’s financial markets have gone off the rails in an equally disorienting fashion. The central bankers that had … Continue reading

Crypto Victims’ Cries for Help Are Piling Up at a Federal Complaint Center

By Pam Martens and Russ Martens: June 22, 2022 ~ The Consumer Financial Protection Bureau (CFPB) is the federal agency that was created under the Dodd-Frank Act of 2010 in response to Wall Street’s harrowing abuses to average Americans in the leadup to the financial crash of 2008. One of its key benefits is that it has a complaint database where consumers can post their complaints to the agency, and the general public and reporters can read those complaints on a public website. The general public benefits by seeing what types of complaints are being made against a financial institution they might be considering doing business with and reporters can look for dangerous patterns that are emerging. We delved into a specific area of complaints at the CFPB yesterday. We put the word “Bitcoin” into the search box and pulled up 1,031 matches. Next we searched under the word “crypto” and … Continue reading