Category Archives: Uncategorized

By Pam Martens and Russ Martens: December 30, 2015  Yesterday Larry Summers penned an opinion piece for the Washington Post, lecturing Senator Bernie Sanders of Vermont, a Presidential candidate, on what Sanders should actually be saying in his own op-eds about reforming the Federal Reserve.  No one will ever accuse Larry Summers of being short on arrogance. After promising the American people in 1999, as Treasury Secretary in the Bill Clinton administration, that pushing through the repeal of the Glass-Steagall Act would be “the right framework for America’s future financial system,” then watching that system collapse as a result of that repeal just nine years later in the worst economic upheaval since the Great Depression, one would think Summers would find some obscure hole in academia and crawl into it. Instead, Summers went on to become President of Harvard where, in 2005, he suggested at an economics conference that women … Continue reading →

By Pam Martens and Russ Martens: December 29, 2015  Senator Elizabeth Warren, Democrat of Massachusetts, has breathed new life into bolstering Americans belief in our Democratic system of government and the notion that one good man or good woman can make a meaningful difference in Congress. Senator Warren was the driving force behind the creation of the Consumer Financial Protection Bureau which has opened a robust two-way dialogue and redress system with the American people regarding the financial crimes being inflicted on them – otherwise known as Wall Street’s institutionalized wealth transfer system – while it is simultaneously under relentless assault by corporate attack dogs masquerading as Republican members of Congress. It was Senator Warren in 2013 that informed us that the so-called Independent Foreclosure Reviews to settle the claims of 4 million homeowners who had been illegally foreclosed on by the bailed out Wall Street banks were a sham. The … Continue reading →

By Pam Martens and Russ Martens: December 28, 2015  Eric Holder, who stepped down this year as the U.S. Attorney General after six years in office, rejoined the law firm he had left to accept the top slot at the Justice Department. That firm is Covington & Burling, which operates a revolving door between the Justice Department and its own front door. In addition to Holder, Lanny Breuer, who headed up the Justice Department’s criminal division under Holder, also returned to Covington & Burling after a devastating report by ABC’s Frontline on how his division had failed to seriously investigate crimes on Wall Street. Making the round trip between the Justice Department and Covington & Burling in 2010 was Steven Fagell, former deputy chief of staff at the criminal division, and Jim Garland, former deputy chief of staff to Attorney General Eric Holder. Dan Suleiman, former deputy chief of staff to … Continue reading →

By Pam Martens and Russ Martens: December 23, 2015  Exactly one year ago today, the headline story at Wall Street On Parade was titled: “Oil Crash: Don’t Believe the Happy Clatter.” We explained that there was a “mushrooming false narrative taking over the business airwaves” predicting that the rapid price decline in oil would lower gas prices at the pump, fueling a healthier consumer with more disposable income and thus a more robust economy for 2015. Our counter prediction was that the oil price collapse “will decidedly not lead to a more robust economy in the United States for very long.” This was our reasoning at the time: “This isn’t a little speed bump in oil prices. This is one of the most dramatic and rapid crashes in a key industrial commodity in history. Since June, the price of West Texas Intermediate (WTI), the domestic crude oil produced in the … Continue reading →

By Pam Martens and Russ Martens: December 22, 2015 Corporate front groups got a big fat Christmas present in the recently passed Omnibus spending bill. Congress is hoping that voters are too distracted with holiday preparations to look at the fine print in its more than 2,000 pages. We were winding our way through its copious contents when we stumbled upon its section on the IRS. Somehow this so-called “spending” bill has legislated into law a right-wing vendetta against the Internal Revenue Service. For example, the IRS is effectively stripped of its ability to writes new rules on 501(c)(4) organizations. Those organizations are increasingly being used as corporate-funded political front groups masquerading as social welfare organizations: The new Omnibus law reads as follows: “During fiscal year 2016: (1) none of the funds made available in this or any other Act may be used by the Department of the Treasury, including … Continue reading →

By Pam Martens and Russ Martens: December 21, 2015  According to a Rasmussen national telephone survey during the week ending December 10, only 24 percent of likely U.S. voters think the country is heading in the right direction. Tens of millions of Americans believe that they can’t put a person in the White House or in Congress who shares their core principles because the system is rigged in favor of powerful moneyed interests. Against that backdrop, with a continuance of the Clinton Dynasty and the Wall Street power players looking ever more likely to dominate in the 2016 Presidential election, along comes an astounding story of how the Democratic National Committee (DNC) handles critical voter information for competing Democratic Presidential campaigns. Let that sink in for a moment.  A Presidential candidate like Senator Bernie Sanders who is asking the American people to engage in a political revolution to meaningfully change … Continue reading →

By Pam Martens and Russ Martens: December 17, 2015  In a properly functioning, rational, and efficient market, any form of Fed tightening after seven years of filling the punch bowl with an elixir of easy money should have been viewed by the markets as a contraction of monetary policy and sent both stocks and risky bonds plunging. But what we saw in the markets yesterday can only be described as bizarre. The Dow Jones Industrial Average, composed of 30 large cap stocks which are viewed as a barometer of the overall U.S. economy, soared 244 points by the close of trading. The Nasdaq, made up mostly of smaller companies than those in the Dow, which would have a harder time in a higher interest rate environment because their debt is rated lower generally, also soared and closed up 75.77 points. A rise in interest rates should have sent utility stocks … Continue reading →

By Pam Martens and Russ Martens: December 16, 2015 If the U.S. government issued a warning yesterday that there was a credible threat of a new terrorist attack from a foreign terrorist, we can guarantee you that it would have made front page headlines. What the U.S. government did instead yesterday was to issue a formal warning that the prospects for a new financial crisis have grown, and, in one area, are at an “historically elevated level.” Since the financial crisis of 2007-2009 did more economic damage to the U.S. than all terrorist attacks combined and will have a devastating impact on the standard of living of the next generation, one would think this new financial warning would have been worthy of a mention on the front pages of mainstream newspapers. And yet, we could find no mention in the New York Times, Los Angeles Times, Chicago Tribune, Washington Post, … Continue reading →

By Pam Martens and Russ Martens: December 15, 2015 The selloff in junk bonds has rattled the markets and is raising questions about just who it is that is providing liquidity to the junk bond Exchange Traded Funds (ETFs) — which have magically redeemed billions of dollars in withdrawals from retail investors while the underlying bonds in their portfolio are under severe stress in the broader marketplace. (Both a junk bond mutual fund and a separate hedge fund were forced to freeze investor withdrawals of their cash last week due to illiquidity in the junk bond market.) Unknown to most retail investors is that there is an entity called an “Authorized Participant” hiding behind the curtain of ETFs that is making that liquidity possible. According to an August 8, 2014 written question and answer exchange between the National Association of Insurance Commissioners and BlackRock and State Street – two large … Continue reading →

By Pam Martens and Russ Martens: December 14, 2015  Last week we saw shades of 2007 with both a hedge fund and junk bond mutual fund halting the ability of investors to withdraw funds. An additional credit hedge fund announced it is shutting down. The problem this time around is a dearth of liquidity (read buyers’ strike) for junk bonds. In 2007 the problem was subprime mortgage backed securities and related derivatives. On June 7, 2007, long before anyone recognized that they were in the first inning of what would become the epic financial crash of 2008, Bear Stearns quietly sent a letter to investors in its High-Grade Structured Credit Strategies Enhanced Leverage Fund, telling them it was suspending the ability of investors to withdrawal their money from the hedge fund because the “investment manager believes the company will not have sufficient liquid assets to pay investors.” The following month, … Continue reading →