Category Archives: Uncategorized

By Pam Martens: October 17, 2013 Five employees of Bernard Madoff are currently on trial for assisting in the perpetration of the largest Ponzi scheme in history; a multi-decade fraud that has resulted in suicides, destroyed retirement dreams, and increased skepticism about the thoroughness of regulators when a Wall Street crony is involved. Madoff was formerly Chairman of the Nasdaq stock market. Both Madoff, and his brother, Peter, who worked together for more than 40 years, are serving prison terms. Two of those currently on trial are Jerome O’Hara and George Perez, former computer programmers who worked at the firm from the early 90s. Both the Securities and Exchange Commission and the U.S. Attorney’s office describe in their respective complaints the intricate level of programming that O’Hara and Perez had to perform to keep the fraud alive. That included programming to generate highly sophisticated account statements, showing stock and option … Continue reading →

By Pam Martens: October 16, 2013 The People’s House, the U.S. House of Representatives, is now the Obstructionists’ House. Many have forgotten whom and what they represent – the American people and the interests of the United States. As major financial institutions dump more and more U.S. Treasury bills, once considered the absolute bedrock of safety, the damage the so-called conservatives are doing to confidence in the U.S. is growing exponentially daily. Yesterday, Fitch Ratings placed the United States sovereign debt on Ratings Watch Negative, meaning it is contemplating a credit downgrade from its current AAA rating on U.S. debt. In 2011, when Congress showed similar dysfunction in raising the debt ceiling, Standard & Poor’s downgraded U.S. debt from its AAA rating to AA+. A country lacking an unblemished AAA credit pays more in interest when it brings its debt to market. And market participants remember which countries have always had … Continue reading →

By Pam Martens: October 15, 2013 There are a number of interesting aspects to the lawsuit filed by Carmen M. Segarra against the Federal Reserve Bank of New York and three of its employees. Segarra was a bank examiner at the New York Fed who is charging in her lawsuit that she was told to change her negative review of Goldman Sachs and when she refused to do so, she was terminated in retaliation and escorted from the Fed premises. The first notable aspect of this saga is that Segarra has hired a lawyer, Linda Stengle, whose office is in Boyertown, Pennsylvania. (It is fairly safe to assume that the number of lawyers working in Manhattan who want to take on the New York Fed and Goldman Sachs runs in the single digits, if they exist at all.) This hunt for legal representation may explain why Segarra is filing her … Continue reading →

By Pam Martens: October 10, 2013  Before Wall Street took a bazooka loaded with credit default swaps and toxic mortgage securitizations and fired it directly at the heart of the U.S. economy, we had a very stable banking system. In the five years before the 2008 crash, only 10 banks failed in the United States. Let me repeat that: ten banks went belly up in the entire period between January 2003 through December 2007.  Since January 2008 through today, the Federal Deposit Insurance Corporation shows 487 banks have failed, with 22 failures just so far this year. With an average of two bank failures per year in the five years before the crash, that means banks are still failing at 10 times the pre-crash rate. But the numbers get worse from there.  While the FDIC shows 487 banks have failed, other data at the FDIC show that a total of 1,306 … Continue reading →

By Pam Martens: October 8, 2013 Last week, Ryan Chittum, writing for the Columbia Journalism Review, unleashed the simmering disgust of hundreds of editors and reporters across America: why won’t former Chairman and CEO of AIG, Maurice (Hank) Greenberg, just shut up and go to trial on his eight year old charges of engaging in accounting fraud at his former company. He’s now on his third New York State Attorney General who has valiantly tried to let this case see the sunshine of a jury trial. What Greenberg has done instead is to pay the law firm of superlawyer David Boies to motion our courts to death while his army of pr flacks try his case on CNBC and in the opinion pages of the Wall Street Journal. Greenberg’s latest soiree into fantasy land came in an October 2 piece in the Wall Street Journal where Greenberg empathized out loud … Continue reading →

By Pam Martens: October 7, 2013 Last Thursday, Mary Jo White, the Chair of the Securities and Exchange Commission since April, spoke at Fordham Law School on “The Importance of Independence” at the SEC. This is akin to Jamie Dimon speaking at the American Bankers Association on the importance of safety and soundness of insured deposits at the Nation’s banks. The audience sensed an agenda: that White was trying to publicly humiliate Judge Jed Rakoff like a schoolboy getting lectured by the teacher in front of the class. Rakoff is the Judge who is challenging the SEC’s perpetual no-admit-or-deny settlements with Wall Street firms. The Wall Street Journal reported that White looked right at Rakoff who was sitting in the room during her lecture. White came to the SEC from Debevoise and Plimpton, a key Wall Street law firm, where she represented some of Wall Street’s biggest names. Her husband, … Continue reading →

By Pam Martens: October 3, 2013 If there is one must see film this year, it is Robert Reich’s newly released “Inequality for All.” If you’ve ever yearned to sit in a Reich public policy class at UC Berkeley, or get your mind around how Wall Street crashed the economy in 2008, or rid yourself of guilt that you’ve failed your family by losing your job or living from paycheck to paycheck – this is your opportunity to take a seat and let the warm and witty former Labor Secretary take you on a journey from 1928 to today. The first stunner comes with the chart we have posted below showing that in 1928 and 2007 – the year before the two greatest financial crashes in U.S. history, income inequality peaked. In the film, Reich says about the graph: “The parallels are breathtaking if you look at them carefully.” Indeed they … Continue reading →

By Pam Martens: October 2, 2013 Two weeks ago the media was galvanized around the fifth anniversary of the collapse of Wall Street, asking experts if Wall Street has changed, could it happen again, and still puzzling over how it happened in the first place. The answers are actually quite simple: Wall Street collapsed under the weight of its own corruption. It took down the whole economy because Congress in 1999 bought into the charlatan idea that banking supermarkets – where FDIC insured deposits were housed under the same roof with Wall Street’s cowboy traders – would “modernize” the U.S. financial landscape. We now know, but few will admit, that Congress was conned into this charlatanism that restructured Wall Street into the precise structure that created the Great Depression through impure motive. As explained in this March 16, 2012 Bill Moyers Interview on PBS With John Reed, the former Co-CEO of … Continue reading →

By Pam Martens: October 1, 2013 It’s come to the point that one must forego sipping anything hot while reading the editorial pages of the Wall Street Journal in order to avoid gasps of hot liquid spewing onto one’s skin or business attire. On September 27, 2013, the Wall Street Journal ran the headline “Robbery at J.P. Morgan” over an unsigned editorial. Curious to see if the Occupy Wall Street crowd might have made off with Jamie Dimon’s Presidential cufflinks, I read on. The next sentence was gasp-worthy: “Government lawyers are backing up the truck again at J.P. Morgan Chase to extract another haul from the country’s largest bank.” And, mind you, it’s not because J.P. Morgan has broken the law or done anything seriously wrong, it’s because the bank is the “Obama Administration’s favorite Wall Street target” because of its independent-thinking CEO, Jamie Dimon, who “keeps deviating from the Obama script.” … Continue reading →