Category Archives: Uncategorized

By Pam Martens: December 4, 2013 Gary Gensler, the outgoing Chairman of the Commodity Futures Trading Commission, previously testified to Congress that he began investigating allegations that a global banking cartel was rigging the international interest rate benchmark known as Libor in the spring of 2008. One can prudently assume that around the same time, he made the issue known to the U.S. Department of Justice.  It’s now almost six years later and yet two of the U.S. banks involved in the cartel, JPMorgan Chase and Citigroup, have yet to be charged by U.S. authorities. Today, JPMorgan and Citigroup have admitted participating in the Yen Libor financial derivatives cartel to the European Commission and accepted fines of €79.8m ($108.3 million) and €70m ($95 million), respectively. Citigroup avoided paying an additional €55m ($74.6 million) by being granted full immunity for one of its three charged infringements, ostensibly for its cooperation in … Continue reading →

By Pam Martens: December 3, 2013 Citigroup, parent of the once walking-dead of commercial banks, Citibank, is attempting to shed its image of Dr. Evil trades, bank bailouts, and student loan horrors through a high-risk outdoor advertising campaign in New York City. Called Citi Bike, the campaign is the brainchild of advertising giant Publicis Kaplan Thaler. Publicis explains the idea this way: “A bike sharing system consists of a fleet of specially designed, sturdy, very durable bikes that are locked into a network of docking stations sited at regular intervals around a city. The bikes can be rented from and then returned to any station in the system, creating an efficient network with many possible points and combinations of departure and arrival. With thousands of bikes at hundreds of stations, Citi Bike will be available for use 24 hours a day, all year ’round.” What does Citibank get out of … Continue reading →

By Pam Martens: December 2, 2013 On any given business day, you can take a taxi ride into lower Manhattan in the wee hours of the morning and see lights and the glow of Bloomberg trading terminals eerily illuminating the 9th floor of the historic Federal Reserve Bank of New York at 33 Liberty Street. A securities trader working at 4:30 a.m. in any other trading location in Manhattan might be concerned about personal safety. Not here. Quietly, without Congressional hearings, and lost in the tragedy and turmoil of September 11, the USA Patriot Act in 2001 bestowed private domestic policing powers on the 12 Federal Reserve Banks, including the New York Fed. On top of its own police force armed with Glock 22s and assault weapons, the building itself is a 22-story fortress with 18 floors above ground and four below. The building, completed in 1924, constitutes the block … Continue reading →

By Pam Martens: November 27, 2013 Fortunately for our readers, the rest of the Federal Reserve system is far more transparent than the Federal Reserve Bank of New York; in fact, they’re down right helpful to the press. Both the Federal Reserve Board of Governors and the Federal Reserve Bank of Philadelphia (Philly Fed) have released educational videos to help the public understand the workings of our Nation’s central bank.  And, of course, there is the unparalleled digital research available to the public through FRASER, the Federal Reserve Archival System for Economic Research, made available by the St. Louis Fed. FRASER has recently provided access to new documents detailing the banking emergency of 1933 when President Franklin D. Roosevelt declared a banking holiday to assess which banks could be reopened safely and which were insolvent and had to close their doors. The 1933 banking calamity stemmed from the same type … Continue reading →

By Pam Martens: November 26, 2013 Unless you’ve been lost at sea since 2008, you’ve likely heard time and again that the Federal Reserve is creating money out of thin air. Type the words “Federal Reserve creates money AND thin air” into the Google search engine and you’ll find about 2.4 million people weighing in on the subject, including folks at PBS. There’s no reason for the debate. The Federal Reserve has put out its very own video explaining how it creates money. It prefers the phrase “newly created electronic funds” to the colloquial “out of thin air.” The video is narrated by Steve Meyer, a Senior Advisor to the Federal Reserve Board of Governors, who explains how the Fed has been paying for those trillions in bond purchases since the 2008 crash. Meyer says on the video: “You may wonder how the Federal Reserve pays for the securities it … Continue reading →

By Pam Martens: November 25, 2013 For more than two decades, financial columnist John Crudele has been hypothesizing on whether the Federal Reserve has its fingers in the stock market – directly or indirectly. Tampering with stocks is off limits to the Federal Reserve, as far as the public is aware. Its stated function is to serve as the central bank of the United States, focusing on achieving monetary policy through its open market activities in the bond markets and foreign exchange area. But the New York Fed itself is helping to fuel suspicions about what’s going on within its cloistered walls at 33 Liberty Street in lower Manhattan. Of the 12 regional Federal Reserve Banks, the New York Fed is the only institution with a trading floor and highly sophisticated trading platforms. But despite multiple requests, the New York Fed will not provide a photo of the full trading … Continue reading →

By Pam Martens: November 21, 2013 Just when it seemed one could no longer be shocked by the corruption, hubris and lack of accountability in the American financial system, along comes yesterday’s release of the Federal Reserve’s minutes for the October 29-30 meeting of its Federal Open Market Committee (FOMC). While mainstream media focuses on what the minutes revealed about when the Fed might begin to reduce its monthly $85 billion in bond purchases, receiving scant attention is a brazen power grab boldly stated on page two of the eleven pages of minutes. Back on October 31, wire services reported that the temporary dollar and foreign currency swap lines that had been put in place between central banks on a temporary basis during the financial crisis had been turned into standing arrangements. The Associated Press explained the action as follows: “Six of the world’s leading central banks, including the U.S. … Continue reading →

By Pam Martens: November 20, 2013 This time around, Republican members of the U.S. Senate Banking Committee want to go on record that they not only see a train wreck coming from the Fed’s easy money policy, but have described it in unmistakable terms to Janet Yellen, the President’s nominee to lead the Federal Reserve. During the recent Senate Banking confirmation hearing of Yellen, three Republican Senators were particularly outspoken about the dangers lurking in the Fed’s policy of pumping $85 billion a month, a whopping $1.02 trillion a year, into Wall Street coffers via bond purchases from the Street. The policy is known in Wall Street jargon as QE3, shorthand for Quantitative Easing, round 3. By preventing a surplus of bonds on the Street, the Fed is keeping interest rates artificially low in hopes of stimulating economic recovery. The flip side of that effort, however, is to flood Wall … Continue reading →

By Pam Martens: November 19, 2013 This morning’s Wall Street Journal headline reads: “J.P. Morgan, U.S. Reach Historic Settlement.” Call me old fashioned, but when I think of the word “historic,” it invariably conjures up good things: the August 18, 1920 ratification of the 19th Amendment giving American women the right to vote – a scant 144 years after the Nation’s founding. Historic is also appropriate to describe the November 4, 2008 Presidential election where Barack Obama became the first African American to secure the Presidential nomination of a major political party and the first to win the Presidential post – a mere 232 years after our great democracy was founded. A Wall Street firm throwing billions at its regulators to preempt its executives going to jail is anything but “historic.” It’s now the rubric on Wall Street and in Washington. The model is so revolting that a sitting Federal … Continue reading →

By Pam Martens: November 18, 2013 Last week was a lesson in obscene wealth breeding abject stupidity. The brands of JPMorgan Chase and Bloomberg News took a self-inflicted beating from preposterously dumb ideas from top management. In both instances, the companies reflected a haughty contempt and insular assessment of public sensibilities. Congress has spent the better part of the year worrying about too big to fail, too big to jail, and too big to prosecute mega banks on Wall Street. JPMorgan seemed to prove last week that these behemoths are even too big to think rationally. In the midst of eight high profile criminal or civil investigations by the U.S. Justice Department involving the fleecing of the little guy’s pocket, JPMorgan decided to effectively take the pulse beat of public sentiment toward its brand. It decided to do this not in a closed-door focus group but in the most public … Continue reading →