Category Archives: Uncategorized

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 →

By Pam Martens and Russ Martens: September 29, 2015  Stocks were variously spiking and tanking from moment to moment in early morning trade and much of the problem resides in one eight letter word – Glencore. The Switzerland-based industrial metals producer and commodity trading firm has lost over 75 percent of its share value this year, dumping 29 percent of that just yesterday. Two of the major credit ratings agencies, Moody’s and Standard & Poor’s, have stated they may downgrade the debt of the company. Credit markets have effectively made those rating outlooks moot and already started trading the debt as junk. The Lehman Brothers’ analogy is being made by market pundits. As if all of this weren’t causing enough market angst, yesterday UK investment firm Investec issued a research report on Glencore, suggesting that shareholders could be wiped out if low raw material prices persist. The report stated: “In … Continue reading →

By Pam Martens and Russ Martens: September 28, 2015 Both Fed Chair Janet Yellen and Pope Francis delivered speeches on Thursday of last week that took an odd turn of events. A section of the Pope’s official speech transcript that slammed the finance industry was gutted before the Pope delivered his address to a joint session of Congress. In the case of Yellen, evidence strongly suggests that egregiously bad event planning sabotaged her speech at the University of Massachusetts in Amherst, triggering media hysteria and prognostications of how fast Stanley Fischer, the Fed’s Vice Chairman, would slide into Yellen’s seat as Chair of the Fed. The official transcript of the Pope’s speech to Congress appears here. It contains the following passage: “Here I think of the political history of the United States, where democracy is deeply rooted in the mind of the American people. All political activity must serve and … Continue reading →

By Pam Martens: September 24, 2015  Pope Francis will address a joint session of the U.S. Congress this morning and is expected to lecture on the country’s ethical and moral challenges. Some feel he should get his own house in order before lecturing others. President Obama held the largest welcoming event for the Pope yesterday on the White House lawn in the history of his administration, replete with color guards and a fife-and-drum corps. The Pope, who prides himself on disdain for materialism and the worship of money, arrived in a tiny Fiat. (See video below.) But the American media’s love fest with the Pope wilted in the afternoon when the Pope addressed a group of 300 bishops at the Cathedral of St. Matthew the Apostle in Washington, D.C. The Pope spoke in only cryptic terms about the horrors of sexual abuse of children within the church. He was immediately … Continue reading →

By Pam Martens and Russ Martens: September 23, 2015  We may have just gotten our answer to the puzzling question of why we can put a man on the moon but the Securities and Exchange Commission can’t create a consolidated tape of our markets for forensic auditing purposes: a consolidated tape would tell us just who it is that is messing around with stock futures in the middle of the night as well as creating flash crashes during the trading day. We thought it was very peculiar that prior to the opening of the U.S. stock market this morning, futures on the Standard and Poor’s 500 index had staged a miraculous rally on the heels of distressing manufacturing news out of China last night. According to the preliminary Caixin/Markit China Manufacturing Purchasing Managers’ Index (PMI) which was released last evening, manufacturing activity in China dropped to 47.0 in September, the … Continue reading →

By Pam Martens and Russ Martens: September 22, 2015  Last Friday, one day after the Fed’s announcement that it would hold rates steady at the zero bound range, the Dow Jones Industrial Average dropped 290 points. It calmed itself a little yesterday but was off more than 200 points in the first five minutes of trading this morning. One catalyst for the market gyrations is that Ann Saphir, a reporter for Reuters, boldly asked Fed Chair Janet Yellen at Thursday’s press conference what has been on many minds for more than a year: is the Fed ever going to raise interest rates or are zero rates here for the rest of our lifetimes. This was the exact exchange: Ann Saphir: “Ann Saphir with Reuters. Just to piggyback on the global considerations, as you say, the U.S. economy has been growing, are you worried that given the global interconnecting this, the … Continue reading →

By Pam Martens and Russ Martens: September 19, 2015 If you want to engage in a serious effort to reform Wall Street, buy two copies of economist and financial writer John Kay’s book coming out in the U.S. on Tuesday. Keep one copy of the book for yourself (share it with family and friends) and send the other copy to a member of the Senate Banking committee. That committee is highly likely to be looking at reforming Wall Street again in the near future, given the convulsions in equity, credit and commodity markets of late and an endless stream of ongoing charges of corruption against the mega banks. In his book, Other People’s Money: The Real Business of Finance, Kay demonstrates not only a sagacious understanding of the grotesque underpinnings of financial markets but he maps out a series of common sense, structural reforms to bring the financial industry back … Continue reading →

Janet Yellen Press Conference, September 17, 2015

By Pam Martens and Russ Martens: September 17, 2015 Donald Trump has led the Republican Party into a dangerous trap. Republicans are now competing for tv ratings rather than a serious run for the White House. It’s the “Republican Hopefuls Reality TV Show,” promoted heavily in advance by CNN as a modernized form of gladiator battle. According to the Oxford Dictionary, Reality TV is a television program “in which real people are continuously filmed, designed to be entertaining rather than informative.” Wikipedia goes further, writing that “the focus tends to be on drama and personal conflict, rather than simply educating viewers.” Completely in step with the above definition, last night’s three-hour Republican debate, aired on CNN from the Ronald Reagan Presidential Library in Simi Hills, California, featured 11 Republican presidential contestants hurling slurs, innuendo, below the belt personal insults and frequently childish digs at each other. The entertainment industry magazine, Variety, … Continue reading →

By Pam Martens and Russ Martens: September 16, 2015 Tomorrow at 2 p.m. investors worldwide will learn if the U.S. Federal Reserve has decided to cease its endless blather about its elusive plan to hike interest rates and actually boost rates from the zero bound range it has enforced since December 2008. A hike in rates will be comforting to foreign investors who rely on a strong U.S. Dollar to protect the value of investments they make in this country: investments like multi-million dollar condos in Manhattan, manufacturing plants in South Carolina, stakes in publicly traded U.S. companies, private equity funds and mega amounts of commercial real estate. A stable or rising U.S. Dollar – supported by Fed talk that the U.S. economy is growing strongly enough to withstand a rate hike – is mothers’ milk to the ears of foreign investors since it means that if they should choose … Continue reading →