Category Archives: Uncategorized

By Pam Martens: December 22, 2013 PBS promised a “debate” this past Friday night on the “benefits and dangers” of the Federal Reserve as the Fed marks its 100 years of existence tomorrow. Instead of a debate, two famous stock market historians made the same stunning announcement – that the Fed has decided its job is to push up the stock market. Consuelo Mack’s Wealthtrack program on PBS had invited James Grant, Editor and Founder of Grant’s Interest Rate Observer, and Richard Sylla, the Henry Kaufman Professor of the History of Financial Institutions and Markets at NYU’s Stern School of Business. The opening scene for the program shows Sylla in a party hat lighting the candles on the Fed’s birthday cake while Grant snuffs them out – suggesting that Sylla would be making pro-Fed statements while Grant would take the opposing view. What happened during the program, however, was that … Continue reading →

By Pam Martens: December 19, 2013 If you’ve read that the stock market staged a big rally yesterday on the news that the Federal Reserve’s Federal Open Market Committee voted to begin to taper its bond buying program by $10 billion a month beginning in January, you’re in possession of half the news. Here’s how the New York Times presented that half of the news: “Stocks rallied on the Fed’s move, with the Standard & Poor’s 500-share index ending up more than 1.5 percent. Investors saw the pullback as a vote of confidence in the economy.” Investors saw no such thing. This is pure, unadulterated malarkey. By 5:34 p.m., the tell-a-lie-a-thousand-times-and-it-becomes-the-truth mantra was in control of mainstream media, with the Wall Street Journal’s MarketWatch reporting: “Two U.S. stock indexes notched record closing levels on Wednesday as markets interpreted the Federal Reserve’s decision to begin the tapering of bond purchases in … Continue reading →

By Pam Martens: December 18, 2013 On Monday, Judge Richard Leon raised a hornet’s nest of questions about the constitutionality of the government’s Orwellian spy tactics against citizens about whom it hasn’t the slightest suspicion of wrongdoing in his decision in Klayman v. Obama. Judge Leon came down on the side of Larry Klayman and Charles Strange, two of the plaintiffs suing the government over its massive collection of tens of millions of phone records of law abiding citizens, which it has given itself the right to probe and analyze for a period of five years. The lawsuit grew out of the revelations made by National Security Agency (NSA) whistleblower, Edward Snowden. The Judge found the program to be in violation of the Fourth Amendment to the U.S. Constitution, writing that he could not “imagine a more ‘indiscriminate’ and ‘arbitrary invasion’ than this systemic and high-tech collection and retention of … Continue reading →

By Pam Martens: December 17, 2013 So much for political labeling. Yesterday, a Federal Court judge appointed by George W. Bush upheld the public’s right to reasonable searches in a court case challenging the Orwellian phone snooping practices of the Obama administration, a President who rode into office on the promise of hope and change and his record as a former civil rights attorney and constitutional law professor. While not yet ruling on the merits of the case, Judge Richard Leon made it quite clear to the government where he stands. Judge Leon granted the motion for an injunction to two of the plaintiffs, Larry Klayman and Charles Strange, but placed the injunction on hold pending the outcome of the government’s appeal. He warned the government, however, to prepare its spy programs for the potential of his ruling being upheld by the Appellate Court, writing that he might institute sanctions … Continue reading →

By Pam Martens: December 16, 2013 Carmen Segarra, a former Bank Examiner at the Federal Reserve Bank of New York, has brought public attention to a little known job function at her former employer – that of the Relationship Manager. The New York Fed is assigned a priority role in oversight and regulation of some of the largest Wall Street banks. Should it be functioning as a tough cop or managing “relationships”? In October, Segarra, a lawyer, filed a lawsuit alleging that Relationship Managers at the New York Fed, who were assigned to manage the relationship with Goldman Sachs, obstructed and interfered with her investigation of the firm and tried to bully her into changing her findings. When Segarra refused to change her findings, she was fired, according to the lawsuit. The U.S. Senate’s Permanent Subcommittee on Investigations should pay close attention to the allegations in this lawsuit and open … Continue reading →

By Pam Martens: December 13, 2013 For those being lulled into a sense of comfort or complacency by the announcement that the Volcker Rule was approved this week (it won’t take full effect until 2015 and maybe not even then), here’s a reminder of what the Dodd-Frank financial reform legislation and the Volcker Rule have not fixed. The corrupt structure of Wall Street is thriving and continues to perpetuate its wealth transfer system. Over 40 black pools are still in existence; the biggest Wall Street firms are still able to dodge putting their customers’ trades on a stock exchange and, instead, match the orders in the darkness inside their own house. Wall Street has given this the benign sounding name of “internalization.” We call it dark markets. Nothing has stopped the high frequency traders from fleecing the little guy who is trying to sell his 100 shares at a fair … Continue reading →

By Pam Martens: December 12, 2013 This month marks the fifth anniversary of Bernard Madoff shocking the world by confessing to running a Ponzi scheme that was eventually tallied up to represent $17 billion in actual losses and $65 billion in paper losses – fictitious amounts shown on customer statements. It may also mark another ignoble first – the first time a Wall Street bank is criminally charged by the U.S. Department of Justice. The Trustee in charge of recovering funds for victims of Madoff’s decades-long Ponzi scheme, Irving Picard, may have forced the hand of the U.S. Department of Justice to bring criminal charges against JPMorgan Chase for the banks’ enablement of the fraud. The New York Times is reporting on its front page today that criminal charges against JPMorgan and a deferred prosecution agreement related to its actions in the Madoff case may be announced before the end … Continue reading →

By Pam Martens: December 11, 2013 If you were a fan of the Dodd-Frank financial reform legislation that did absolutely nothing to rein in Wall Street’s ability to plunder the life savings of the little guy, you will absolutely love the Volcker Rule that was approved, but not instituted, yesterday by five regulators. Just like Dodd-Frank, it’s voluminous, running over 800 pages, postpones the actual enactment into the distant future, and is chock full of loopholes and slippery passages. The so-called Volcker Rule is Section 619 of the Dodd-Frank legislation. Its original intent was to quickly stop banks holding insured deposits from speculative trading for their own account (proprietary trading). It was also meant to prevent banks from owning hedge funds and private equity funds which could potentially blow up an insured depository institution and require the kind of taxpayer bailouts that occurred in 2008. We can now emphatically tell … Continue reading →

By Pam Martens: December 10, 2013 It’s five years and counting since Wall Street collapsed under the weight of its own corruption, aided and abetted by compromised regulators, and yet, by many measures, the financial system  is more vile than it was pre-crisis. Yesterday, Andrew Brooks, head of U.S. equity trading at mutual fund giant T. Rowe Price, which manages $647 billion in customers’ funds, called the markets “dysfunctional” in an article in the Wall Street Journal. Mentioned elsewhere in the article was the growing unlit marketplace where trades are conducted by more than 40 dark pools away from exchanges or the continuing practice of internalization where the biggest Wall Street firms match their own customers’ buy and sell orders away from the stock exchanges. The signature financial reform legislation of the Obama administration, the Dodd-Frank Wall Street Reform and Consumer Protection Act, is increasingly seen as a bureaucratic boondoggle, … Continue reading →

By Pam Martens: December 9, 2013 The Federal Reserve will celebrate its 100th anniversary on December 23 of this year. But the Federal Reserve did not function as the nation’s central bank until 1922 when it fumbled and stumbled its way into an awareness of the power of a centralized mechanism for buying and selling U.S. government securities as a means of carrying out monetary policy. Thanks to a trove of historic documents recently released by the St. Louis Fed, we are now able to see how the New York Fed, a bastion of Wall Street interests, maneuvered itself into control of that process. Incredibly, from its legislative creation in 1913 until 1922, the Federal Reserve had 12 separate “central” banks carrying out monetary policy for their region of the country. Each of the 12 regional Federal Reserve banks was allowed to buy and sell government securities and trade acceptances. … Continue reading →