Category Archives: Uncategorized

By Pam Martens and Russ Martens: November 3, 2015  It’s not every week that the regulator of the biggest banks in the U.S. and one of those biggest banks are both warning of growing financial risks. On Sunday, Bank of America – the parent of Merrill Lynch and its more than 15,000 financial advisors – released a report calling the outlook for markets next year “perilous” and warning that “markets have not priced in quantitative failure.” The report came from Michael Hartnett, Bank of America’s Chief Investment Strategist and his team. Yesterday, Thomas Curry, head of the Office of the Comptroller of the Currency (OCC) which regulates all national banks in the U.S., gave his second speech in a week and a half, using both occasions to warn of increasing credit risks at the biggest banks. Curry spoke yesterday at the Risk Management Association’s annual conference in Boston. Curry dropped … Continue reading →

By Pam Martens and Russ Martens: November 2, 2015 Last March, Wall Street On Parade reported that the appointment calendar of Ben Bernanke during his Chairmanship of the Federal Reserve in the years of the greatest financial crash since the Great Depression, showed 84 redactions of meetings he conducted with unnamed persons between January 1, 2007 through the collapse of Bear Stearns on the weekend of March 15-16, 2008. According to the “official” record, those months were far from the core months of the financial crash, which are said to have been triggered with the collapse of Lehman Brothers on September 15, 2008 and the quick implosion of other major financial institutions that Fall. Last month, Bernanke released a 600-page tome on the crash, The Courage to Act: A Memoir of a Crisis and its Aftermath. (It’s not every day that an author credits himself with courage in a book … Continue reading →

By Pam Martens and Russ Martens: October 29, 2015  Chances are pretty high that among the daily lexicon of most Americans, you are not going to hear the words “maker-taker.” And yet, outside of the debate about preventing Wall Street’s too-big-to-fail banks to create another epic taxpayer bailout in the future, the maker-taker debate is one of the hottest on Wall Street. On Tuesday of this week, the glacially-slow to respond Securities and Exchange Commission (SEC) held a full day hearing on the “maker-taker” model and other stock market structure dysfunctions. In simple terms, maker-taker is another wealth extraction tool used by Wall Street firms to pick the public’s pocket in the name of stock market liquidity. In more complex terms, brokers servicing retail clients and institutions (like those managing your pension money) are incentivized to send their customers’ stock limit orders to trading venues that will pay them a … Continue reading →

By Pam Martens and Russ Martens: October 28, 2015  The Federal Open Market Committee (FOMC) of the Federal Reserve will release its statement today at 2 p.m. (ET). It is widely expected that the Fed will be holding rates steady. The Fed has been signaling for more than a year that the U.S. economy is strong enough for it to raise interest rates gradually. Based on comments from various Fed speakers, many had expected the rate hike to come in September. Wall Street on Parade has taken a skeptical view of the Fed’s happy talk about the economy – preferring to look at the cold, hard data coming from inside and outside the Fed. It now seems quite plausible that the Fed’s agenda all along has been to talk up the U.S. dollar to prevent capital flight while waving pom-poms to boost confidence and spur consumer spending. Corporate media seems … Continue reading →

By Pam Martens and Russ Martens: October 27, 2015 The Securities and Exchange Commission will be holding a public meeting today on the structure of today’s opaque and deeply fragmented stock markets (without conceding that they are also rigged, as many informed voices contend). The meeting will begin at 9:30 a.m. and will be webcast on the SEC’s website. The meeting is considered by many to be a few crumbs sprinkled about the corrupted landscape by Mary Jo White, Chair of the SEC, in the face of a growing campaign to oust her from office. During the second week of September, CREDO Action had a “Dump (Mary Jo) Truck” making the rounds between Union Station, K Street and the White House. CREDO Action has also collected over 116,000 signatures on a petition urging President Obama to ask for the SEC Chair’s resignation. In June, Senator Elizabeth Warren sent a stern, … Continue reading →

By Pam Martens and Russ Martens: October 25, 2015 On Friday, Senator Bernie Sanders of Vermont spoke before the Democratic National Committee’s Women’s Leadership Forum in Washington, D.C., calling the United States an oligarchy and reasserting his call for a “political revolution.” Sanders said that “In the last election, last November, 63 percent of the American people didn’t vote, 80 percent of young people didn’t vote, and today, millionaires and billionaires are buying the election. Is that what democracy in this country is supposed to be about? I think not…We need a political revolution.” Sanders said his campaign has already made political history, earning the support of 750,000 donors with an average contribution of $30 each. He said that number of contributions at this point in a campaign sets a new historical record. Sanders said his plan for winning the White House is to “rally millions of working class people … Continue reading →

By Pam Martens and Russ Martens: October 22, 2015  One of the common complaints heard about the U.S. financial regulatory system is that it’s so fragmented that one hand doesn’t know what the other is doing. For example, both the Office of the Comptroller of the Currency (OCC) and the Federal Reserve Board of Governors (Fed) regulate the largest banks – including the biggest banks on Wall Street. But neither of these regulators has any clarity on the securities trading risks that these banks holding trillions in insured deposits are taking. Neither does the FDIC that insures the deposits with backstopping from the taxpayer. That’s the Securities and Exchange Commission’s job. The same banks are also taking big risks in commodities and futures trading – but that’s left to the oversight of the Commodity Futures Trading Commission (CFTC). And on and on it goes. A speech given yesterday by Thomas … Continue reading →

By Pam Martens and Russ Martens: October 21, 2015 Just when you thought Wall Street’s heist of the U.S. financial system couldn’t get any crazier, along comes a regulator’s report on FDIC-insured banks exposure to derivatives. According to the Office of the Comptroller of the Currency (OCC), one of the regulators of national banks, as of June 30 of this year, Goldman Sachs Bank USA had $78 billion in deposits, and – wait for it – $45.7 trillion in notional amount of derivatives. (Notional means face amount of derivatives.) According to the OCC report, Goldman Sachs Bank USA’s notional derivatives are an eye-popping 563 percent of its risk-based capital. You and every other little guy in America are backstopping this bank because it’s, amazingly, FDIC insured. Compared to its Wall Street peers, Goldman Sachs Bank USA is a midget. JPMorgan Chase Bank NA has just shy of $2 trillion in … Continue reading →

By Pam Martens and Russ Martens: October 20, 2015  During the recent Democratic Presidential debate that aired on CNN on October 13, Senator Bernie Sanders of Vermont said: “Let us be clear that the greed and recklessness and illegal behavior of Wall Street, where fraud is a business model, helped to destroy this economy and the lives of millions of people.” Most Americans clearly understand that reality, and yet, Wall Street’s regulators continue to look the other way at the most outrageous conflicts of interest. On June 2, 2014, Wall Street’s self-policing body, FINRA, disclosed for the first time details on which publicly traded companies were being traded in dark pools and the source and volume of that trading. Dark pools are effectively unregulated stock exchanges and are operated by some of the largest commercial banks on Wall Street – which are also backstopped by the taxpayer for any losses … Continue reading →

By Pam Martens: October 19, 2015  A funny thing happened in 2012 after Andrew Ross Sorkin, a financial writer at the New York Times, wrote his spectacularly false narrative telling readers that the repeal of Glass-Steagall Act had nothing to do with the crash because problem firms like Lehman Brothers, Merrill Lynch and AIG didn’t own insured commercial banks — which would have been prohibited under the Glass Steagall Act, had it not been repealed in 1999. In fact, all three of the firms did, indeed, own banks insured by the FDIC at the time of the crash. We figured that Sorkin had just made an error, or, well, three monster errors, so we wrote to his editor. We heard nothing. We wrote to the New York Times public editor who is supposed to uphold the integrity of the paper. Nothing. We wrote to the publisher. Nothing. To this very … Continue reading →