Category Archives: Uncategorized

  By Pam Martens and Russ Martens: February 22, 2016  Fourteen years before Wall Street blew itself up in 2008, the General Accounting Office (now called the Government Accountability Office), warned Congress that Wall Street was on a dangerous path that could put the taxpayer at risk of bailouts as a result of trillions of dollars of derivatives being held by a handful of interconnected firms. These dangers were heightened according to the GAO by shoddy accounting practices for derivatives, inadequate regulatory reporting, and high leverage. Despite the fact that almost every single warning that the GAO called out in 1994 was ignored by the U.S. Congress, leading to the greatest financial collapse since the Great Depression in 2008, Congress has still not attended to the most dangerous elements highlighted in the report. Back in 1994, the GAO found that: “U.S. bank regulatory data indicate that the top seven domestic … Continue reading →

By Pam Martens and Russ Martens: February 19, 2016  Neel Kashkari, the newly installed President of the Federal Reserve Bank of Minneapolis, shook things up earlier this week by suggesting options to deal with Wall Street’s too-big-to-fail banks that include breaking them up, as Senator Bernie Sanders has suggested, or regulating them like public utilities such as nuclear power plants. The nuclear power plant regulatory regime analogy was not a good one. In fact, that’s how we’ve been regulating the complex, high-risk banks with the same kind of catastrophic outcomes to the public in terms of economic impact: think Chernobyl disaster in 1986; Fukushima Daiichi nuclear disaster in 2011; versus global financial meltdown in 2008 resulting from inept regulatory oversight. In fact, just ten days before Kashkari spoke on February 16, CNN was reporting that radioactive tritium was leaking into groundwater at the Indian Point nuclear power plant in Buchanan, … Continue reading →

By Pam Martens and Russ Martens: February 18, 2016  Last year, Ian Millhiser released his book, Injustices: The Supreme Court’s History of Comforting the Comforted and Afflicting the Afflicted. On the book jacket, Millhiser cogently summed up the cruelties inflicted on this nation as a result of lifetime appointments of bigoted and elitist gatekeepers on the U.S. Supreme Court: “The justices of the Supreme Court have shaped a nation where children toiled in coal mines, where Americans could be forced into camps because of their race, and where a woman could be sterilized against her will by state law. The Court was the midwife of Jim Crow, the right hand of union busters, and the dead hand of the Confederacy. Nor is the modern Court a vast improvement, with its incursions on voting rights and its willingness to place elections for sale.” On the topic of race, the book explores … Continue reading →

By Pam Martens and Russ Martens: February 17, 2016  What is it about Goldman Sachs that makes so many people want to go rogue? There is the brilliant Nomi Prins, a former Managing Director at Goldman, who called the firm an “autocratic and hypocritical organization” in her groundbreaking 2004 book Other People’s Money: The Corporate Mugging of America. On March 14, 2012, Goldman Sachs VP Greg Smith tendered his resignation with a scorching oped in the New York Times, lamenting “how callously people talk about ripping their clients off,” and noting that he had witnessed “five different managing directors refer to their own clients as ‘muppets.’ ” Carmen Segarra didn’t actually work for Goldman Sachs but she was frequently stationed there as its bank examiner from the New York Fed. Segarra should have received a national award in 2014 as the gutsiest bank examiner in America. To back up her … Continue reading →

By Pam Martens and Russ Martens: February 16, 2016  If you are not yet sufficiently repulsed by the billionaire class in New York City riding roughshod over the most basic rules of ethical conduct, consider what just happened at AIG – the too-big-to-fail insurance company that was bailed out by the taxpayer during the 2008 crisis to the eventual tune of a $182 billion commitment, while its Board had the gall to pay multi-million dollar bonuses to its disgraced executives. AIG also used its bailout money to make multi-billion dollar backdoor payments to Goldman Sachs and other Wall Street banks for credit default swap bets they had made, which AIG had insured, on dodgy subprime mortgage products. AIG’s Board of Directors just appointed hedge fund titan, John Paulson of Paulson & Company, to its Board – despite the fact that he is named in a SEC complaint as a willful … Continue reading →

By Pam Martens and Russ Martens: February 15, 2016 Millions of Americans would have trouble defining even one of the amendments to the U.S. Constitution known as the Bill of Rights — which set forth the individual freedoms we gained through bloody street protests and wars waged by our ancestors. Millions of Americans have never participated in a street protest or marched for a cause they care about passionately. Many Americans have lost the ability to even care – believing the system is hopelessly corrupted beyond cure. We sat in a small local theatre this past Saturday with friends to watch the new Michael Moore movie, “Where to Invade Next.” Coming in the midst of the presidential debates where one candidate is running on a platform to make America great again while continually insulting women and minorities and another is promising to reform campaign finance while raking in boatloads of … Continue reading →

By Pam Martens and Russ Martens: February 14, 2016  The facts surrounding the death of Associate Supreme Court Justice, Antonin Scalia, are in a state of continual flux. The question is why? The highly controversial Justice is reported to have died sometime between Friday night and Saturday morning at an isolated 30,000-acre luxury resort, Cibolo Creek Ranch in West Texas. The ranch is 30 miles from civilization. Scalia was initially reported to have gone there with “a friend” to quail hunt but that has been called into question. The name of the friend has not been released, raising more questions as to why the public has been denied a full accounting of the matter. The owner of the resort, John Poindexter, a Houston multi-millionaire, told NBC News that Scalia arrived at the ranch at around noon on Friday on a charter flight from Houston. As for the quail hunting, Poindexter … Continue reading →

By Pam Martens and Russ Martens: February 12, 2016 Starting last July, the share prices of the biggest banks on Wall Street have been on a steady downward trajectory. That trend heated up yesterday with Citigroup and Bank of America both dropping over 6 percent by the close of trading. Goldman Sachs and Morgan Stanley were down by over 4 percent. All four of the banks set new 12-month lows in intraday trading. A strong argument can be made that much of the public’s lack of confidence in these complex banking and gambling behemoths is a result of the dark curtain that has been drawn around their operations. Evidence is piling up that government regulators of Wall Street no longer see themselves as the protectors of the people but as the protectors of Wall Street’s secrets. The American historian, Henry Steele Commager, once wrote that “The generation that made the … Continue reading →

By Pam Martens and Russ Martens: February 11, 2016  Yesterday during the House Financial Services Committee hearing to take semi-annual testimony from the Fed Chair on monetary policy and the health of the U.S. economy, a tense exchange took place between Congressman Sean Duffy and Fed Chair Janet Yellen. (See video clip below.) Duffy effectively accused Yellen of defying a Congressional subpoena related to a House investigation of a Fed leak in 2012. The House investigation centers around a quite brazen newsletter put out by a firm called Medley Global Advisors that in 2012 reported what the Fed’s FOMC minutes were going to reveal the following day.  One revelation from the newsletter referred to continued large bond purchases by the Fed as follows: “Tomorrow’s minutes will reference a staff paper that concludes the market has capacity to absorb purchases this large for a period of time.” When the Fed released … Continue reading →

By Pam Martens and Russ Martens: February 11, 2016  At 8:00 a.m. this morning, futures on the Dow Jones Industrial Average were flashing a 274 point plunge at the open of the stock market at 9:30 a.m. ET, following a selloff of 99.64 points by the close of trading yesterday. There’s plenty of things rattling this market, not the least of which is the continued weakness in the share prices of the mega Wall Street and European banks. Analysts have started asking on business news outlets if there is something going on that the public can’t see. Adding to the market angst was the jumble of questions Fed Chair Janet Yellen received during her semi-annual testimony before the House Financial Services Committee yesterday. One particular line of questioning from multiple members of the Committee was on whether the Federal Reserve has the legal authority to use negative interest rates as … Continue reading →