Category Archives: Uncategorized

By Pam Martens and Russ Martens: December 11, 2014 Just as a business succeeds or fails on the basis of trust by its customers, it can also be said that a nation succeeds, over the long term, through the trust and confidence of its citizens. There are now ample warning signs that America is dangerously heading in the wrong direction. As income and wealth inequality in the United States have set records, Americans’ are acknowledging their awareness that this could not have happened without the willful participation of key institutions and leaders. Historic record lows were set at various times this year in polls measuring Americans’ trust in Congress, approval of President Obama, confidence in the Supreme Court, faith in media, and the popularity of the Democratic party – the party commonly seen to care about leveling the playing field for the little guy. This alarming level of cynicism on … Continue reading →

By Pam Martens: December 10, 2014 Yesterday, the U.S. Senate Select Committee on Intelligence released a 499-page Executive Summary of its 6,000-page report on the use of torture by the CIA during the presidency of George W. Bush. The outrage to the findings was immediate and worldwide. The New York Times called the conduct “a portrait of depravity that is hard to comprehend.” Senator John McCain, who experienced torture first-hand during the Vietnam War, said the CIA had “stained our national honor.” Stephen Kinzer, writing in the Boston Globe, said that “no one has suggested that these officers, or their superiors, were doing anything other than what elected leaders wanted them to do. By focusing on the CIA’s kidnappers, torturers, and fabulists, this report diverts us away from the central responsibility of political leaders.” Among the barbarous tactics used against the prisoners was waterboarding, sleep deprivation while standing in stress … Continue reading →

By Pam Martens: December 9, 2014 After being up as much as 2.4 percent during the session, China’s Shanghai Composite Index plummeted over 8 percent in heavy trading in a two-hour period overnight, finally closing down 5.4 percent. At least one trigger for the rout was an announcement by a stock exchange clearing agency in China that lower-rated bonds will no longer be allowed as collateral for repurchase agreements, a move that instantly impacted credit market liquidity and sent sellers into the stock market to raise cash, according to a report at Bloomberg News. China is far from the only country or market regulator that is worried. On November 25, 2014, the International Capital Market Association (ICMA) released a study by Andy Hill on the European corporate bond market which found that “A commonly held view is that a correction to the credit rally is inevitable and is likely to … Continue reading →

By Pam Martens and Russ Martens: December 8, 2014 On Thursday, November 20, 2014, the body of 54-year old Melissa Millan, a divorced mother of two school-age children, was found at approximately 8 p.m. along a jogging path running parallel to Iron Horse Boulevard in Simsbury, Connecticut. A motorist had spotted the body and called the police. According to the coroner’s report, it was determined that Millan’s death was attributable to a stab wound to the chest with an “edged weapon.” Police ruled the death a homicide, a rarity for this town where residents feel safe enough to routinely jog by themselves on the same path used by Millan. Information has now emerged that Millan had access to highly sensitive data on bank profits resulting from the collection of life insurance proceeds from her insurance company employer on the death of bank workers – data that a Federal regulator of … Continue reading →

By Pam Martens and Russ Martens: December 4, 2014 Yesterday, Wall Street on Parade reported on how the corrupt tentacles of Wall Street have engulfed the mindset of our newly minted law school graduates. Getting one’s resume noticed from those of a stack of competitors previously meant using a good grade ivory linen stock instead of cheap white copy paper. Today, the word is apparently out that getting one’s resume noticed at a major Wall Street bank requires advertising one’s special knack, inside track, or secret sauce for ripping off society for the profit advantage of the big dogs on Wall Street. On November 20, Senator Carl Levin and the Senate’s Permanent Subcommittee on Investigations released a 396-page report and 8-inch stack of exhibits exposing more shocking Wall Street secrets that have been heretofore protected from daylight by timid or captured regulators. Among the exhibits was a resume submitted to … Continue reading →

By Pam Martens: December 3, 2014 On April 29, 2010 at 7:47 in the evening, Francis Dunleavy, the head of Principal Investing within the JPMorgan Commodities Group fired off a terse email to a colleague, Rob Cauthen. The email read: “Please get him in ASAP.” The man that Dunleavy wanted to be interviewed “ASAP” was John Howard Bartholomew, a young man who had just obtained his law degree from George Washington University two years prior. But it wasn’t his law degree that Bartholomew decided to feature at the very top of the resume he sent to JPMorgan; it was the fact that while working at Southern California Edison in Power Procurement, he had “identified a flaw in the market mechanism Bid Cost Recovery that is causing the CAISO [the California grid operator] to misallocate millions of dollars.” Bartholomew goes on to brag in his resume that he had “showed how … Continue reading →

By Pam Martens: December 2, 2014 Yesterday, William Dudley, President of the scandalized Federal Reserve Bank of New York, cast off his Fire Warden’s helmet long enough to enthrall an audience at Bernard M. Baruch College in New York City with his soothsaying ability on economic matters. Dudley sits at the helm of the regional Fed bank that supervises the mega Wall Street banks that collapsed the U.S. economy in 2008. His ability to supervise either the Wall Street banks or his own institution has come into serious question. Recently, he told Senator Elizabeth Warren during a Senate hearing that he viewed his regulatory role over Wall Street not as a cop on the beat but “more as a fire warden,” making sure the banks don’t burn down. (Burning the country down is clearly another matter.) The U.S. Senate Subcommittee on Financial Institutions and Consumer Protection called Dudley to testify … Continue reading →

By Pam Martens: December 1, 2014 If there’s a robust recovery in the U.S., somebody forgot to tell the commodities market, and the U.S. Treasury market, and holiday shoppers. Crude oil plunged over 10 percent on Friday, following an OPEC decision to keep output at 30 million barrels a day. Both West Texas Intermediate (WTI), the U.S. domestic crude and Brent, the international benchmark, traded lower overnight at prices not seen since 2009 – in the midst of the financial crisis. Both WTI and Brent are now under $70 a barrel, seeing a decline of 38 percent this year with a loss of 18 percent in just November. One might attempt to chalk up the plunge in oil prices to a situation unique to OPEC overproduction or supply coming from U.S. and Canadian shale production were it not for other economic indicators also flashing red. The Bloomberg Commodity Index of … Continue reading →

By Pam Martens: November 26, 2014 The way the 200-year old publishing house, John Wiley & Sons, is pumping out books enticing average folks to trade the markets, one might be inclined to forget that 2014 will go down in history as the year when there were more charges of rigged markets on television, in courtrooms, at Senate hearings, and in prosecutors’ offices than at any time in the history of markets. If ever there was a time less conducive to trying your hand at trading, I can’t think of it, although October 29, 1929 might be a contender. Wiley says it “provides everything the trader needs to survive and succeed in every kind of market.” But if every market is rigged against even highly sophisticated traders, how could a rookie with a little book learning succeed? Let’s review what we’ve learned so far this year. On March 30, author … Continue reading →

By Pam Martens: November 25, 2014 Last Thursday, the U.S. Senate’s Permanent Subcommittee on Investigations, chaired by Senator Carl Levin, released an alarming 396-page report that details how Wall Street’s too-big-to-fail banks have quietly, and often stealthily through shell companies, gained ownership of a stunning amount of the nation’s critical industrial commodities like oil, aluminum, copper, natural gas, and even uranium. The report said the scale of these bank holdings “appears to be unprecedented in U.S. history.” Adding to the hubris of the situation, the Wall Street banks’ own regulator, the Federal Reserve, gave its blessing to this unprecedented and dangerous encroachment by banking interests into industrial commodity ownership and has effectively looked the other way as the banks moved into industrial commerce activities like owning pipelines and power plants. For more than a century, Federal law has encouraged the separation of banking and commerce. The role of banks has … Continue reading →