Category Archives: Uncategorized

By Pam Martens and Russ Martens: October 3, 2016 The gyrations in Deutsche Bank’s shares last week together with a June report from the International Monetary Fund indicating that the bank was “the most important net contributor to systemic risks” has cast a trading pall over all of the global banks. Against that backdrop, most Americans would be stunned to learn that the German Deutsche Bank, which perpetually finds itself on the wrong side of the law, was bailed out in five separate U.S. emergency lending operations during the 2007-2010 financial crisis, receiving more than twice the emergency financial assistance as that received by Lehman Brothers, the failed U.S. investment bank. According to the Government Accountability Office (GAO), Deutsche Bank received cumulative loans totaling $77 billion under the Federal Reserve’s Primary Dealer Credit Facility (PDCF) and $277 billion in cumulative loans under the Term Securities Lending Facility (TSLF) for a total of $354 … Continue reading →

By Pam Martens and Russ Martens: September 30, 2016 One day after Federal Reserve Chair Janet Yellen failed to reassure the House Financial Services Committee that too-big-to-fail banks no longer pose a threat to the U.S. financial system, the stock market settled the debate. Germany’s largest bank had a dizzy spell and Wall Street banks swooned under a collective anxiety attack. The writing has been on the wall for a very long time that this scenario was going to eventually play out given the lack of serious reform of Wall Street. What was notable about yesterday’s market activity is that among the major Wall Street banks, Goldman Sachs fared worst, falling 2.75 percent, followed by Morgan Stanley which shed 2.30 percent and Citigroup, which lost 2.28 percent. All of the major Wall Street banks were dragged down by the 6.67 percent decline in the shares of Deutsche Bank by the … Continue reading →

By Pam Martens and Russ Martens: September 29, 2016 Last Thursday, September 22, 2016, the body of Ann Korkki, a Senior Administrative Assistant in the Wealth Management division of JPMorgan Chase in Denver, Colorado was found with the body of her sister, Robin Korkki, inside their luxury vacation villa at the Maia Resort on Seychelles, an island in the Indian Ocean off the East African coast. Ann Korkki was 37; her sister Robin was 42. According to the local Seychelles newspaper, there was no sign of violence on the bodies of the women who were on a one week vacation at the resort. The mother and brother of the sisters are currently in Seychelles “pressing U.S. and local officials for details” and making arrangements to bring the sisters back to the U.S. according to a news report in the Minneapolis Star Tribune, which covered the story because the sisters had … Continue reading →

By Pam Martens and Russ Martens: September 28, 2016 On September 22, 2016 eight Senate Democrats, including Elizabeth Warren, Bernie Sanders, Jeff Merkley and Sherrod Brown, wrote to the Department of Labor requesting an investigation of the banking behemoth, Wells Fargo, to determine if it violated labor laws. The letter came amidst the public outcry over news that Wells Fargo’s employees had opened as many as 2 million customer accounts without authorization in order to meet stringent sales quotas for cross-selling products. The Senators wrote in the letter: “…dozens of former and current Wells Fargo employees have come forward to describe the lengths they went to in order to meet the bank’s aggressive sales quotas. When quotas weren’t met, employees faced threats of termination; mandated hours of unpaid overtime; harassment; and other forms of retaliation. For years Wells Fargo employees have described a management culture characterized by ‘mental abuse,’ being … Continue reading →

By Pam Martens and Russ Martens: September 27, 2016 After repeated, but ignored, warnings over the past two years from researchers at the U.S. Treasury’s Office of Financial Research (OFR), the new banking crisis has arrived with a vengeance and at a most inopportune time – when confidence is already draining from the financial system because of two U.S. presidential candidates with the highest disapproval ratings in modern history.  Yesterday, Germany’s largest financial institution, Deutsche Bank, lost 7.06 percent by the close of trading on the New York Stock Exchange. That plunge in one of the most globally-interconnected banks dragged down the shares of every major Wall Street bank yesterday: Bank of America lost 2.77 percent; Morgan Stanley declined by 2.76 percent; Citigroup lost 2.67 percent; Goldman Sachs shed 2.21 percent; and JPMorgan Chase closed down 2.19 percent. Deutsche Bank, whose shares traded at more than $120 pre-crisis in 2007, … Continue reading →

By Pam Martens and Russ Martens: September 26, 2016 Donald Trump has made a big deal about Hillary Clinton being beholden to Wall Street. That’s true. Wall Street’s mega banks and hedge funds have been major donors to Clinton’s campaign committees after showering her and Bill Clinton with millions of dollars for speeches. But Donald Trump is just as beholden to Wall Street’s mega banks because they are financing his business empire, doing so frequently behind an opaque curtain. On August 21, the New York Times ran a front-page article by Susanne Craig that pegged Trump’s business debt at $650 million. Three days later, Fortune’s Shawn Tully took a closer look and pegged Trump’s debt at $1.11 billion. According to Trump’s financial disclosure form updated in May of this year, hundreds of millions of dollars of Trump’s business debt will “mature” over the next seven years. But we don’t actually know … Continue reading →

By Pam Martens and Russ Martens: September 23, 2016 The horror stories that continue to spill out about what Wall Street banks are doing behind their cloistered walls have blurred the actual function of Wall Street: to efficiently allocate capital so that new industries can be born and thrive in America, creating new jobs and a rising standard of living for all of our fellow citizens. In the same week that the U.S. Senate Banking committee was taking testimony that one of the biggest Wall Street banks, Wells Fargo, was opening two million unauthorized customer accounts over at least a four-year span in order to generate fees and meet daily sales quotas, the Wall Street Journal reported yesterday that just 68 new companies had been listed for public trading this year, a drop of 51 percent from the 138 companies that had gone public by this time last year. Let’s … Continue reading →

By Pam Martens and Russ Martens: September 22, 2016 Yesterday the Federal Open Market Committee (FOMC) of the Federal Reserve released its policy statement, which included its announcement to stand pat on interest rates at this meeting. The third sentence of this policy statement went like this: “Household spending has been growing strongly….” To use the parlance of Wall Street, the Fed was putting lipstick on a pig. The average American might read that statement as it bounced around the newswires and conflate “household spending” with a strong consumer. Nothing could be further from the truth. Household spending data is actually capturing how Wall Street masterminds continue to fleece the 99 percent. Just six days before the FOMC policy statement was issued, this is how USA Today reported on the strength of the consumer based on the Commerce Department’s release of retail sales data: “U.S. retail sales slumped in August … Continue reading →

By Pam Martens and Russ Martens: September 21, 2016 While the U.S. Senate Banking Committee was taking testimony yesterday from the Chairman and CEO of Wells Fargo bank, John Stumpf, about his $19 million in pay last year and how Carrie Tolstedt was set to retire with $120 million from the bank, despite both of them presiding over the creation of  two million bogus bank accounts and credit cards, the Federal Reserve’s Open Market Committee (FOMC) was debating the wisdom of hiking rates and setting off a temper tantrum by Wall Street banks or standing still and losing more credibility. We will know the outcome of that conversation when the FOMC makes its announcement at 2 p.m. ET today. American banking has now evolved from too-big-to-fail to too-big-to-prosecute to too-big-and-dangerous-to-return-to-normal-monetary-policy. Since December of 2008, the Federal Reserve has held its interest rate benchmark at zero or almost zero. On December … Continue reading →

By Pam Martens: September 20, 2016 Imagine how you might feel if you were part of a distinguished family that built a respected business over 120 years only to see it gobbled up against your wishes by a banking behemoth, Wachovia, which collapsed a year later and was then forced into a shotgun wedding with another mega bank, Wells Fargo. Today, the Senate Banking Committee will put the finishing touches on this tragic tale of how a fine St. Louis family, the Edwards, lost control of their legacy of putting the customer first, to end up as part of a company now being shamed for opening two million fake accounts that were never authorized by its customers. The Edwards family story will not be part of today’s Senate hearing, but one can easily imagine that five generations of Edwards will be looking down from heaven today on the proceedings and … Continue reading →