Category Archives: Uncategorized

By Pam Martens and Russ Martens: February 21, 2018 Nothing buttresses Senator Bernie Sanders’ position that fraud on Wall Street is not a bug but a feature better than the news last week that the Citigroup Board was bumping up CEO Michael Corbat’s pay by 48 percent to $23 million for 2017. Corbat has sat at the helm of the bank since October 2012 as the bank has paid more than $12 billion in fines and restitution for serial abuses of the public and investors, including its first criminal felony count in more than a century of existence. The felony count came on May 20, 2015 from the U.S. Department of Justice over the bank’s involvement in a bank cartel that was rigging foreign currency markets. Numerous other charges against the bank have focused on money-laundering. Citigroup’s long history of involvement in money-laundering also gives the appearance of being a … Continue reading →

By Pam Martens and Russ Martens: February 20, 2018 On February 14, the week after the Dow Jones Industrial Average experienced two separate days of more than 1,000-point losses, the House Financial Services’ Subcommittee on Capital Markets, Securities and Investment convened a hearing to discuss various legislative proposals to return to the wild west era of derivatives trading on Wall Street. (Many, including Wall Street On Parade, believe that we’ve never left that era – the risks have simply been hidden behind a dark curtain. See related articles below.) One lonely voice for sanity on the witness panel, which was stacked with industry trade groups, was Andy Green, Managing Director at the Economic Policy Center for American Progress. Green’s written testimony stated that the legislative proposals “slice, dice, or otherwise poke holes – sometimes large holes – in the firewalls placed in the derivatives markets by post 2008 reforms….” Green … Continue reading →

By Pam Martens and Russ Martens: February 16, 2018 In towns across America there are laws that prevent government officials from meeting secretly. Typically, the officials must first publish a notice to the public with the date and time of the meeting; circulate the notice in a widely read publication and post the notice on the official website in order to give the public advance notice and the ability to attend the meeting or hearing. The ability of the U.S. public to attend government meetings; hear firsthand what is being done with taxpayers’ dollars; ask questions about any perceived conflicts that might exist; and file Sunshine law requests for documents is how citizens hold government officials accountable. When we lose that, we lose the entire concept of America as a country of the people, by the people and for the people. Thus, any effort at all to whittle away at … Continue reading →

By Pam Martens and Russ Martens: February 15, 2018 Last Friday, Christian Mueller-Glissmann, an equity strategist at Goldman Sachs, took to the airwaves at CNBC to discuss last week’s market selloff and entered a new phrase into the lexicon of investing. Mueller-Glissmann said: “The way this market has traded in this correction has been very much in line with our thesis from last year which was called the ‘Balanced Bear.’ You might remember this – this idea that equities and bonds can sell off together.” In response to a question from his CNBC interviewer as to whether this means there is nowhere to “go and hide” in a market like this, Mueller-Glissmann responded: “Exactly. I think you’re dealing with a much higher portfolio risk, not only with equities being riskier but a much higher portfolio risk because there’s very little places to hide.” If there’s nowhere to hide, we’d like … Continue reading →

By Pam Martens and Russ Martens: February 14, 2018 On Monday, an anonymous whistleblower sent a letter via his lawyer to the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) charging that traders were manipulating the stock market volatility index known as the VIX. The whistleblower said that a flaw exists in the VIX that “allows trading firms with sophisticated algorithms to move the VIX up or down by simply posting quotes on S&P options and without needing to physically engage in any trading or deploying any capital.” The Chicago Board Options Exchange (CBOE) where VIX options and futures trade, quickly denied the claims. This whistleblower claims come at a time when billions of dollars are blowing up around the globe because traders placed wrong-way bets that the VIX would maintain the low volatility levels it has enjoyed over multiple years as a result of low … Continue reading →

By Pam Martens and Russ Martens: February 13, 2018  It’s not every day that three well-credentialed men are willing to put their names and reputations behind the allegation that the U.S. Federal Reserve is rigging the stock market. But that’s exactly what happened yesterday. Paul Craig Roberts, a former Associate Editor of the Wall Street Journal and Assistant Secretary of the U.S. Treasury under President Ronald Reagan joined with Economist Michael Hudson and Wall Street veteran Dave Kranzler to write that “it appears that in May 2010, August 2015, January/February 2016, and currently in February 2018 the Fed is rigging the stock market by purchasing S&P equity index futures in order to arrest stock market declines.” This is not the first time the Fed has come under such suspicion. In 2013 Time Magazine’s Dan Kadlec wrote the following about the unprecedented number of central banks that were moving into stock … Continue reading →

By Pam Martens and Russ Martens: February 12, 2018 Here’s what is feeding fear in the stock market: Trump’s presidency is spinning out of control leaving no adults in the room; the much ballyhooed tax cut legislation is actually going to produce frightening budget deficits that push up interest rates to a level that crashes the stock market; the Republican Party that pushed for this fiscally-irresponsible tax cut plan will be responsible for handing the House over to Democrats in the midterms, putting an end to the deregulation perks to corporations that have buoyed this stock market; if the House shifts leadership so will important House Committees like Intelligence and Financial Services, which may decide to start issuing meaningful subpoenas. And that’s just for starters. A big fear that is much less talked about involves the changing role that global central banks have played  in stock and bond markets. The … Continue reading →

By Pam Martens and Russ Martens: February 9, 2018 The Dow Jones Industrial Average (Dow) has now had two days of losses of more than 1,000 points in the last four trading sessions: Monday and yesterday. The Dow consists of some of the oldest companies in America and, to a large degree, what are regarded as the safest stocks to hold by investors because of their liquidity, large capitalization and steady dividends. The Nasdaq, on the other hand, consists primarily of much younger companies, many in the roller-coaster technology field, and far shorter histories of paying dividends. Typically, in a market panic, one would expect the Nasdaq to show a deeper dive than the Dow. But as the top chart above indicates, on Monday and Tuesday it was actually the Dow that saw a deeper selloff. Then yesterday, Thursday, February 8, the two widely disparate markets traded in almost complete … Continue reading →

By Pam Martens and Russ Martens: February 8, 2018 The U.S. Senate Banking Committee needs to get its act together and immediately schedule hearings on the trading outages that occurred at numerous discount brokers and mutual funds on Monday. According to thousands of on-line complaints, customers of major firms like TD Ameritrade, Fidelity, Vanguard, and T. Rowe Price could not access their accounts using the firms’ websites on Monday and thus could not place sell or buy orders as the market dove 1,597 points in mid afternoon, then partially recovered to close down 1,175 points. At online outage tracker, downdetector.com, both TD Ameritrade and Fidelity were verbally brutalized by outraged customers, many of whom said they had lost thousands of dollars as a result of the outage. Others commenters were stirring up momentum for a class action lawsuit. Complaints against Fidelity included this one from a poster calling himself Lee … Continue reading →

By Pam Martens and Russ Martens: February 7, 2018 On Monday afternoon, the Dow Jones Industrial Average was trading down about 700 points. Over the next 11 minutes, it fell more than 800 points in what can only be described as a Flash Crash as the Dow abruptly recovered to pare its loss from down 1,597 points to a final close of down 1,175 points on the day. Small investors who had stop-loss orders in place saw those orders triggered and their stocks sold, only to see their stocks recover much of those losses within minutes. This was eerily reminiscent of the Flash Crashes on May 6, 2010 and August 24, 2015. Small investors (as well as institutional investors like municipal pension funds who work for the little guy) frequently have in place standing stop-loss orders that sit on the stock exchange order books to sell a stock at a … Continue reading →