Category Archives: Uncategorized

By Pam Martens and Russ Martens: August 14, 2017 According to the latest data from the New York Stock Exchange, margin debt has hit new peaks four times this year, starting with a new record of $513 billion in January; $528 billion in February; $536.9 billion in March; and reaching a whopping $549 billion in April. The most recent reading for June shows a decline to $539 billion – but that is still an increase of 64 percent from the margin level of January 2008, the year of the epic financial crash on Wall Street. Spiraling margin debt, where investors pledge securities at their brokerage firm to obtain a loan, typically to buy more securities, is frequently associated with stock market crashes. The dot.com bust followed a margin buying binge in 1999 and early 2000. Margin debt exploded from $153 billion in January 1999 to $278.5 billion by March of … Continue reading →

By Pam Martens and Russ Martens: August 10, 2017 On April 7, 2011 the Dow Jones Industrial Average closed at 12,409.49. Yesterday, it closed at 22,048.70, an increase of more than 9600 points over the six-year span. A bull market of this magnitude lasting more than half a decade would have been expected by Wall Street experts to have sucked in even the most cynical Wall Street naysayers. It hasn’t. Each April, the polling firm, Gallup, conducts its annual Economy and Personal Finance Survey. It asks U.S. adults whether they personally or jointly have money invested in the stock market, either in individual stocks or stock market funds, including through vehicles such as 401(k)s and Individual Retirement Accounts (IRAs). Gallup began its 2011 survey on April 7, 2011, the day that the Dow closed at 12,409.49. That year’s survey found that 45 percent of Americans owned no stocks. Despite a … Continue reading →

By Pam Martens and Russ Martens: August 9, 2017 On August 7 the Federal Reserve released an updated report on consumer debt. It raises more questions about how the big Wall Street banks are making all those billions of dollars in profits. Since 2012, the benchmark 10-year U.S. Treasury note has yielded below 2.5 percent for the majority of that period. But according to the Federal Reserve chart above, on all consumer credit card accounts assessed interest, the interest rate charged to consumers has moved from 12.96 percent in 2012 to 14 percent as of May 2017. (The 14 percent figure is defined as follows by the Fed: “The rate for accounts assessed interest is the annualized ratio of total finance charges at all reporting banks to the total average daily balances against which the finance charges were assessed (excludes accounts for which no finance charges were assessed).” From 2012 … Continue reading →

By Pam Martens and Russ Martens: August 8, 2017 Yesterday, Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, spoke to the Rotary Club of Downtown Sioux Falls, South Dakota and then opened up the mic to questions from the audience. One question concerned today’s lack of true innovation rather than just innovations in social media. Kashkari responded as follows: Kashkari: “This is a big complicated topic. A big question mark in the economics profession is why is productivity growth in the U.S. economy so low. It’s much lower than it has been in prior decades. And, we think, you pull out your iPhone or Twitter or Facebook – you think, wow, all this stuff is happening. Well, some experts say the things that we’re creating now – that we’re innovating now – just aren’t that impactful. They don’t really move the needle very much. So if you compare … Continue reading →

By Pam Martens and Russ Martens: August 7, 2017 Last Monday, Thomas Hoenig, the Vice Chairman of the Federal Deposit Insurance Corporation (FDIC), sent a stunning letter to the Chair and Ranking Member of the U.S. Senate Banking Committee. The letter contained information that should have become front page news at every business wire service and the leading business newspapers. But with the exception of Reuters, major corporate media like the Wall Street Journal, Bloomberg News, the Business section of the New York Times and Washington Post ignored the bombshell story, according to our search at Google News. What the fearless Hoenig told the Senate Banking Committee was effectively this: the biggest Wall Street banks have been lying to the American people that overly stringent capital rules by their regulators are constraining their ability to lend to consumers and businesses. What’s really behind their inability to make more loans is … Continue reading →

  By Pam Martens and Russ Martens: August 3, 2017 The Federal Reserve Board of Governors is supposed to have a roster of seven Governors. It currently has four. Equally alarming, it lists just two members serving on each of its eight committees. One Fed Board Governor, Lael Brainard, is listed as one of the two members on six of the eight committees, or 75 percent of all committees. Governor Jerome Powell sits on five of the eight committees, or 63 percent of all committees. The Fed’s Committee on Supervision and Regulation consists of just Powell and Brainard. And yet, this is what the Fed’s 2015 Annual Report describes as the institutions the Fed supervises: 4,922 Bank Holding Companies 442 Domestic Financial Holding Companies 470 Savings and Loan Holding Companies 839 State Member Banks 154 Foreign Banks Operating in the U.S. Along with other entities per the graph above. There … Continue reading →

By Pam Martens and Russ Martens: August 2, 2017 There seems to be an unlimited supply of methods in which the rich in America keep getting richer and the average Joe picks up the tab. (Think about the $16 trillion secret bailout of Wall Street by the Federal Reserve from 2007 to 2010 for the quintessential example.) Yesterday, Fortune Magazine ran this sobering headline: “The Wealth Gap in the U.S. Is Worse Than In Russia or Iran.” The article quotes Richard Florida, author of The New Urban Crisis, as follows: “Inequality in New York City is like Swaziland. Miami’s is like Zimbabwe. Los Angeles is equivalent to Sri Lanka. I actually look at the difference between the 95th percentile of income earners in big cities and the lower 20%. In the New York metro area, the 95th percentile makes $282,000 and the 20th percentile makes $23,000. These gaps between the rich … Continue reading →

By Pam Martens and Russ Martens: August 1, 2017 Were it not for the profanity-laced tirade that Donald Trump’s briefly tenured Director of Communications offered up to a New Yorker reporter, it might be considered a badge of honor to get fired from both the great vampire squid, Goldman Sachs, and by the President whose administration is firmly ensnared in Goldman Sachs’ tentacles. Wall Street veteran and hedge fund titan, Anthony Scaramucci, who was fired yesterday after a 10-day stint as Director of Communications for Trump’s White House, told reporter Courtney Comstock in 2010 at Business Insider that he had been “fired from Goldman a year and five months” into his tenure there as an investment banker. Scaramucci was rehired by Goldman a few months later, but in a sales position. Scaramucci’s ties to Wall Street are extensive, including a stint as Managing Director at Lehman Brothers, the iconic investment … Continue reading →

By Pam Martens and Russ Martens: July 31, 2017 Back on January 12, 2017, Wall Street On Parade had a foreboding about the President-elect and his impact on the nation’s currency. We wrote at the time: “The President of the United States is typically viewed as the person whose top job is to inspire confidence in the dignity, integrity and sanity of his leadership of the country. But the presser held by President-elect Donald Trump yesterday, the first in six months and likely viewed by world leaders around the globe, was short on confidence building and long on slandering the American media and U.S. intelligence agencies. In short order, the U.S. dollar took a dive. Trump has yet to assimilate the concept that his words no longer belong just to him but attach themselves like flypaper to the credibility of the most powerful nation on earth.” This morning, reporters at … Continue reading →

By Pam Martens and Russ Martens: July 12, 2017 When members of the U.S. House Financial Services Committee question Fed Chair Janet Yellen this morning following her testimony on monetary policy, many Republicans on the panel will be posturing for their money masters who fund their political campaigns rather than asking questions that benefit the average American. You can tell that there has been a Koch Network-corporate takeover of the House Financial Services Committee by the statement that its Chairman, Jeb Hensarling, plastered on the front page of the Committee’s web site following the heroic actions of the Director of the Consumer Financial Protection Bureau, Richard Cordray, on Monday. Cordray reopened the nation’s courts to millions of Americans who have been the victims of predatory actions by the banks that fund Hensarling’s seat in Congress. On Monday, Cordray went up against the most powerful players on Wall Street and the … Continue reading →