Category Archives: Uncategorized

By Pam Martens and Russ Martens: May 15, 2017  Six days after Zembla, a Dutch public broadcasting program, aired an investigation of U.S. President Donald Trump’s business ties to Russian oligarchs and mobsters, Trump fired the man in possession of a great many more details on that matter: FBI Director James Comey. Next, Trump announced that his law firm, Morgan, Lewis & Bockius, was providing a “certified” letter stating that he had no business interests in Russia. (That law firm, as ABC News was quick to point out, was itself named “Russia Law Firm of the Year” in 2016 by Chambers & Partners.) The Morgan, Lewis & Bockius letter was dismissed as meaningless by multiple tax experts since Trump could easily have investments with Russian partnerships and offshore entities. The letter pertained only to investments in which Trump is “sole or principal owner.” These omitted minority partnership entanglements are precisely what … Continue reading →

By Pam Martens and Russ Martens: May 12, 2017 Last evening, Donald Trump was interviewed by NBC’s Lester Holt on the growing controversy surrounding Trump’s motivations in firing the Director of the FBI, James Comey. Excerpts from the interview have been widely carried on numerous media channels. In one particularly noteworthy moment, Holt queried Trump on his money ties to Russia with Trump responding that he had just given Republican Senator Lindsey Graham a letter confirming that he has no investments in Russia. The exchange between Holt and Trump went as follows: Holt: Can you tell us whether you, your family, your businesses, your surrogates have accepted any investments, any loans from Russian individuals or institutions? Trump: In fact, I just sent a letter to Lindsey Graham from one of the most prestigious law firms in the country — a tremendous highly rated law firm — that I have nothing … Continue reading →

By Pam Martens: May 11, 2017 For as long as we have been observing Wall Street sleaze (three decades and counting) we have been reading about illegal sales contests and mutual fund abuses at Morgan Stanley and its 1997 merger partner, the retail brokerage firm Dean Witter. Given that history, when we read last week that Morgan Stanley was going to gut one of the all-time best families of mutual funds from its client offerings (Vanguard Funds), we felt our readers deserved a fuller understanding of the facts than they were getting from corporate media. Incredibly, a number of corporate media outlets tried to pass this off as Morgan Stanley attempting to “close out under-performing and less popular funds.” Before we get to the nitty-gritty of why Morgan Stanley is freaking out about the respected Vanguard Funds, some necessary background is in order. Our earliest recollection of the mutual fund … Continue reading →

By Pam Martens and Russ Martens: May 10, 2017 Both CNN and CBS News have now confirmed that a grand jury had been convened as part of the investigation into Trump campaign associates’ ties to Russia prior to President Donald Trump firing FBI Director James Comey. CNN first reported the news last evening that the U.S. Attorney’s office in Alexandria, Virginia had issued grand jury subpoenas in recent weeks to associates of former National Security Advisor Michael Flynn seeking business records. CBS News confirmed the report this morning, adding that “the probe has been going forward aggressively.” The convening of a grand jury is typically associated with a belief that criminal activity may have occurred. President Trump has come under withering criticism last night and today for firing the head of the FBI while the agency was conducting an active investigation of people close to the President. Why the President … Continue reading →

By Pam Martens and Russ Martens: May 9, 2017 As U.S. equity markets continue to price to perfection a grab bag of promised corporate giveaways from their Best Forever Friend, President Donald Trump, a group of researchers at the International Monetary Fund (IMF) had the temerity to ask last month – what could possibly go wrong. In their April 2017 “Global Financial Stability Report,” IMF researchers methodically pare back the rosy lenses of the U.S. equity market and focus on the warning signs in the U.S. corporate debt market. Two particular findings have the power to potentially jolt the equity markets out of their euphoric stupor. The researchers note: “The [U.S.] corporate sector has tended to favor debt financing, with $7.8 trillion in debt and other liabilities added since 2010…” [Italics added.] “The number of [U.S.] firms with very low interest coverage ratios—a common signal of distress—is already high: currently, firms … Continue reading →

By Pam Martens and Russ Martens: May 8, 2017 On Thursday of last week, legendary investor Warren Buffett, CEO of Berkshire Hathaway, told CNBC that his company had sold about one-third of its big stake in IBM during the first and second quarters of 2017. From a position of approximately 81 million shares of IBM, Berkshire’s stake is now believed to be in the 50 million share range. Buffett said he no longer values IBM the same way he did in 2011 when he began acquiring his large position. The big puzzle for Buffett watchers is why he ever bought IBM. A simple glance at the stock’s long-term chart shows the company has been an underperformer for a very long time. Back in 2013, Wall Street On Parade compared the performance of IBM, a tech company, to that of Procter and Gamble, a presumably less-sexy household products company. We found … Continue reading →

By Pam Martens and Russ Martens: May 5, 2017 On Wednesday, the General Accountability Office (GAO), the bipartisan congressional watchdog, released an in-depth report on the U.S. government’s challenging fiscal outlook. Despite its surprising revelations, the study received little to no coverage by major media outlets. While most Americans have been led by political rhetoric to believe that government programs like Medicare and Medicaid are the biggest threats to the future U.S. fiscal picture, the GAO study found the following: “While health care spending is a key programmatic and policy driver of the long-term outlook on the spending side of the budget, eventually, spending on net interest becomes the largest category of spending in both the 2016 Financial Report’s long-term fiscal projections and GAO’s simulations.” The GAO cited a simulation that showed net interest payments on U.S. debt increasing “from $248 billion in fiscal year 2016 to $1.4 trillion in … Continue reading →

By Pam Martens and Russ Martens: May 4, 2017  For the past three decades, Thomas J. Curry has been a public servant, specializing in bank supervision. Most recently, Curry served as head of the Office of the Comptroller of the Currency (OCC), the regulator of national banks – which oversees some of the biggest banks in the U.S. Yesterday, the Trump administration announced that Curry would be replaced with Keith Noreika, who will serve as Acting Director of the OCC until the U.S.  Senate confirms a permanent new head. Noreika’s history has been that of a bank lawyer for two decades. Noreika has been with the corporate law firm Simpson Thacher & Bartlett LLP for the past 10 months. Prior to that, however, he spent almost 18 years at Covington & Burling, the law firm where the top dogs in Obama’s Justice Department sprang from. Those top dogs, including U.S. … Continue reading →

By Pam Martens and Russ Martens: May 3, 2017 Andrew Ross Sorkin, the New York Times business writer who created a meme against breaking up the big Wall Street banks out of a mountain of grossly inaccurate facts, was pummeled by readers yesterday for doubling down on his out-of-touch position. Sorkin’s latest article was addressing the recent comments by President Trump and his Director of the National Economic Council, Gary Cohn, indicating that they are taking a look at restoring the Glass-Steagall Act – the depression era legislation that separated banks holding insured deposits from the high risk investment banks that underwrite and trade risky securities. The Glass-Steagall Act protected the nation’s banking system from its passage in 1933 to its repeal in 1999 during the Bill Clinton administration. It took just nine years after its repeal for Wall Street to implode in the same epic fashion as 1929 – … Continue reading →

By Pam Martens and Russ Martens: May 2, 2017 Yesterday, Bloomberg News reporters Jennifer Jacobs and Margaret Talev snagged an interview with President Donald Trump. Headlines quickly spread that during the interview Trump had indicated he was looking at breaking up the biggest Wall Street banks (so that commercial banks holding taxpayer-backstopped deposits were no longer under the same ownership as the high-risk investment banks which had failed so spectacularly during the 2008 financial crash). Bloomberg News has now released a transcript of the interview. The portion pertaining to the Wall Street banks reads as follows: BLOOMBERG NEWS: Should we break up the big banks? Do you support that? TRUMP: I’m looking at that right — I didn’t know this one was going to be brought up. But we are looking at that. There are — you know, some people that want to go back to the old system, right? … Continue reading →