Category Archives: Uncategorized

By Pam Martens and Russ Martens: October 15, 2015 Yesterday, the U.S. Treasury auctioned one-month Treasury bills at a zero percent interest rate. By late afternoon, the bills were trading in the secondary market at a negative yield of 0.0152. As the above chart shows, short term Treasury bill rates today are tracking a pattern similar to that of the Great Depression. That spike in the yield in the above chart in 1937 came as a result of the Federal Reserve increasing bank reserve requirements – a credit tightening – which sent the economy into a further leg of the downturn and more deflation. After the tightening in 1937, GDP fell by 10 percent and unemployment returned to 20 percent. The well known lesson of the 1937 folly is the major reason many Fed historians do not believe the Fed has any serious intention of raising its Federal Funds rate … Continue reading →

By Pam Martens and Russ Martens: October 14, 2015 In the minds of millions of viewers, Hillary Clinton came across in last night’s Democratic debate on CNN as polished, articulate and knowledgeable about the issues. But for those of us who understand that the greatest threat to America is not some foreign power but home-grown financial terrorists wielding trillions of dollars in high-risk derivatives in taxpayer-insured banks on Wall Street, she is the same old problem, not the solution. Senator Bernie Sanders of Vermont, on the other hand, who calls himself a Democratic Socialist, was in Congress leading the fight to stop the repeal of the Glass-Steagall Act in 1999 and is still leading the charge to restore it before the next financial crash destroys what’s left of the U.S. economy. (The Glass-Steagall Act prohibits insured banks from being affiliated with high risk investment banks or stock brokerage firms.) It … Continue reading →

By Pam Martens and Russ Martens: October 13, 2015 The average American, scraping to get by, put food on the table, pay the mortgage, has no time at all to drill down and root out the real facts that would enable him or her to separate propaganda from the economic reality facing the U.S. and the rest of the globe. That’s why we created Wall Street On Parade. It’s a labor of love for our fellow citizens to give you a meaningful jungle guide to survive this era of unprecedented corruption and hubris with a roof still over your head and a shirt on your back. In a few years, when you look back, you’ll realize “jungle guide,” if anything, was a serious understatement. This morning stock markets around the globe are flashing red. The perceived wisdom is that the news driving stocks lower is a report out of China that … Continue reading →

By Pam Martens and Russ Martens: October 12, 2015 To fully get your mind around Hillary Clinton’s new, toothless plan to “Prevent the Next Crash” on Wall Street, you need to know a few things right up front. Hillary hails not from the Democratic Party that genuinely cares about America’s staggering wealth and income inequality and the plight of the little guy, but from a grotesquely disfigured hybrid organization informally known as the “Wall Street Democrats.” In that hybrid organization, money trumps morals, duty to country and the public interest. It is a shrine to crony capitalism, infused with lawyers who believe “it’s legal if you can get away with it.” Just as Wall Street’s watchdogs suffer from regulatory capture, the Wall Street Democrats are afflicted with “cognitive capture,” a polite way of saying public officials covet the wealth they hang around with on Wall Street and expect equal earning power when … Continue reading →

By Pam Martens and Russ Martens: October 8, 2015  Our email inbox yesterday and this morning raised more alarm bells for the mega banks – you know the ones we mean; the ones that should have been broken up before we were on the cusp of the next downturn. Here’s a quick rundown before we get into the details: Deutsche Bank announced it will take an approximate $7 billion writedown in the third quarter and potentially eliminate its dividend; Charles Schwab is out with a report on the potential for deflation and what it could do to corporate earnings; The Treasury’s Office of Financial Research released a report on big bank liquidity concerns; Bank of America released a report on the $100 billion exposure that the troubled commodities firm, Glencore, poses to global financial institutions; Bloomberg Business is reporting on the anticipated revenues downturn when big U.S. banks begin to … Continue reading →

By Pam Martens and Russ Martens: October 7, 2015  Hillary Clinton just can’t catch a break. After making the admitted poor choice of using a private server for her emails during her time as Secretary of State instead of one protected by the U.S. government and its security octopus, Hillary has told the public that she turned over all work-related emails from her time as Secretary of State to the government and erased all of her 31,000 personal emails from that period. Now it turns out that a company called Datto Inc., which routinely makes demos of setting fire to equipment to show how indestructible its data backup system is, may have a stash of Hillary’s emails. Its founder and CEO, Austin McChord, was named this year as one of Forbes “30 Under 30,” a prestigious list of technology entrepreneurs under the age of 30. To make matters even more … Continue reading →

By Pam Martens and Russ Martens: October 6, 2015  Will the American people ever get an honest writing of the 2008-2009 Wall Street collapse? If you think it is to be found in the new book released on Monday by former Fed Chairman Ben Bernanke (which we seriously doubt you are thinking) you will be disappointed. What you will find in Bernanke’s book are photos of his grandparents, a photo of the Time Magazine cover with himself named “Man of the Year,” a photo of Bernanke with the masterminds of the repeal of the investor protection act known  as Glass-Steagall (Robert Rubin, Alan Greenspan, Larry Summers), a photo of the grand double staircase in the Federal Reserve building, and so forth. What you will not find is an honest accounting of how the Fed allowed Citigroup to grow into a financial Frankenstein and then quietly and secretly shoveled trillions of … Continue reading →

By Pam Martens and Russ Martens: October 5, 2015  Last week we wrote about the invisible hand’s removal of a negative paragraph on the financial industry from the Pope’s speech before a joint session of Congress and some bizarre shenanigans with Fed Chair Janet Yellen’s highly anticipated speech in Amherst, Massachusetts. This past Saturday, Adam Posen, the President of a powerful think tank, the Peterson Institute for International Economics, delivered a speech at a conference sponsored by the Federal Reserve Bank of Boston, calling the U.S. Financial Stability Oversight Council (FSOC) “a mess.” That speech has gone missing from online access. FSOC is the body created under the Dodd-Frank financial reform legislation of 2010 to reassure the American people that Wall Street would never again be able to take the U.S. economy, the financial system, and the housing market to the cleaners and then get a multi-trillion dollar bailout. FSOC … Continue reading →

By Pam Martens and Russ Martens: October 1, 2015 An uncanny number of people woke up this week with the same thought – it’s time to panic over the size, structure and illiquidity of the junk bond market. (Not to put too fine a point on it, but Wall Street On Parade made the warning in 2013 and again on August 18 of this year.) On Tuesday morning, it was both Carl Icahn, the famous hostile takeover artist and hedge fund billionaire, along with the more staid academics at the International Monetary Fund (IMF), who issued junk bond warnings. (Junk bonds are corporate debt with ratings below investment grade, also known as “high yield” bonds.) Icahn released a video (see clip below) assigning blame to companies like BlackRock which have bundled illiquid junk bonds into Exchange Traded Funds (ETFs), listed them on the New York Stock Exchange, and sat back … Continue reading →

By Pam Martens and Russ Martens: September 30, 2015 On March 10, 2000 the Nasdaq stock market, which is supposed to hold the technology and startup companies that will keep America globally competitive in the future, closed at a high of 5,048.62. Yesterday, more than 15 years later, it closed at 4,517.32, a decline of 10.5 percent from its level of March 2000. To fully grasp the unprecedented nature of the Nasdaq bubble of 2000, one has to look at where the three big stocks are today that made that 5,000 mark possible 15 years ago. Just three stocks, Microsoft, Cisco, and Intel, were valued at a market cap of $1.89 trillion in 2000. As of yesterday’s close, those three stocks had a combined market cap of $616.137 billion – a shrinkage of 67 percent after more than 15 years. Much of the hype, as well as the money, that … Continue reading →