Category Archives: Uncategorized

December 17, 2012 Our thoughts and prayers go out to the children and adults of Newtown, Ct – both those now beyond harm and those who are trying to process this senseless and violent act of a young man just fourteen years older than his youngest victim.

By Pam Martens: December 14, 2012  Based on worries expressed by friends and comments I see under financial articles, there is great angst among Americans on a broad range of financial issues. I’ve frequently read comments indicating people are not opening their financial statements, just filing them away unopened, to avoid the stress of looking at their roller-coaster account balance.  Frankly, that’s a recipe for disaster. Errors can, and do, occur and checking that statement carefully is a hallmark of prudent investing.  The best way to deal with angst is not to pull the covers over one’s head but to be proactive.  Make a decisive plan and stay on course.  If your investments are causing you sleepless nights, at the top of your proactive plan should be: speak to my financial advisor about my unease.  Under law, investments are supposed to be “suitable” for the client.  That implies things like: don’t buy a risky growth … Continue reading →

By Pam Martens: December 13, 2012  The ink was barely dry on the $1.9 billion get-out-of-jail-free card that those corporate lawyers that now head up the U.S. Department of Justice handed global bank, HSBC, on Tuesday when long-overdue outrage erupted from the media.  There was so much attention to the HSBC stench that a potentially more fascinating and equally smelly deal from the Justice Department went down with little attention the very next day.  More on that in a moment.  On the Justice Department’s decision to add part of the drug money laundered by HSBC to its own coffers and call it a day without prosecuting HSBC or any of its employees, CNN quoted Notre Dame law professor, Jimmy Gurulé, an international expert on criminal law.  Gurulé said the settlement “makes a mockery of the criminal justice system,” adding that “there appears to be an exception for employees of large … Continue reading →

By Pam Martens: December 12, 2012  Yesterday, Lanny Breuer, the Assistant U.S. Attorney General for the criminal division of the Justice Department, appeared on CNBC to defend the deferred prosecution agreement with the global banking giant, HSBC – a deal which settled drug money laundering and other crimes for $1.9 billion without prosecuting any HSBC employee.  What Breuer was effectively defending was the five years that his former law partner, John Dugan, was HSBC’s primary banking regulator and did nothing to rein in the outrageously lawless behavior at the bank.  Dugan headed the Office of the Comptroller of the Currency (OCC), which regulates all national banks, from August 4, 2005 through August 14, 2010.  During that period, according to the Senate Permanent Subcommittee on Investigations, the OCC turned a blind eye to abuses at HSBC. In fact, it was not until Dugan left the OCC that a report was issued in … Continue reading →

By Pam Martens: December 11, 2012  On July 17 of this year, the Senate Permanent Subcommittee on Investigations released a 330-page report on banking giant HSBC, together with 100 documents and internal emails, evincing a culture of hubris and potentially criminal actions when it came to U.S. banking laws.   Today, the U.S. Department of Justice and multiple other U.S. regulators will tie all that up with a tidy red bow for a settlement of $1.921 billion; a small nick in HSBC’s profits of $22 billion last year. HSBC released a statement saying it was “profoundly sorry.”  During the July 17 Senate hearing on HSBC, Subcommittee Chairman, Carl Levin, questioned Chistopher Lok, the former head of global banknotes at HSBC Bank USA, about internal emails from HSBC that the Senate had in its possession.  In the first email, a subordinate tells Lok that a proposed bank customer has a “know your customer” … Continue reading →

By Pam Martens: December 10, 2012  This past Friday, the Securities and Exchange Commission (SEC) brought an enforcement action against an alleged Miami fraudster, Claudio Osorio, and his accountant, Craig Toll, whom it charged with swindling $16.8 million from five duped investors based on a series of outrageous lies about their startup company. Now, thanks to Congress and its second worst financial idea since the repeal of the Glass-Steagall Act in 1999, things just got a lot easier for stock charlatans.  In April, President Obama signed into law the Jumpstart Our Business Startups Act (JOBS Act).  The title of the legislation tells you all you really need to know: this Congress will pass the most horrific piece of anti-consumer, anti-investor legislation if it has a flag-waving title and enough special interest money backing it.  The goal of the legislation is in keeping with the grotesque mindset of Washington: in the midst … Continue reading →

By Pam Martens: December 7, 2012  It seems like a day doesn’t go by that an advertisement from Ken Fisher doesn’t pop up on my laptop when I’m visiting a business news web site.  It’s been going on for months.  The ads suggest that I’ll be doomed if I don’t read the latest report from Ken Fisher; it’s a “must read” with research and analysis “you can’t find anyplace else.” And, by the way, if you don’t have $500,000 or more to invest, just fuhgeddaboutit.  Yesterday, I decided to check out this fellow and find out how he can afford all these ads.  Turns out, this Ken Fisher is the financial columnist for Forbes magazine and has defied the destiny of most other business writers in America by becoming a billionaire — worth $1.8 billion as of September 2012 according to Forbes.  But Fisher is not your average 1 percenter – he … Continue reading →

By Pam Martens: December 6, 2012 (This column, with updates, runs periodically at Wall Street on Parade. Please consider emailing it to friends and family members.) A study conducted by Edward N. Wolff for the Levy Economics Institute of Bard College in March 2010 made the following findings: The richest 1 percent received over one-third of the total gain in marketable wealth over the period from 1983 to 2007. The next 4 percent also received about a third of the total gain and the next 15 percent about a fifth, so that the top quintile collectively accounted for 89 percent of the total growth in wealth, while the bottom 80 percent accounted for 11 percent. Debt was the most evenly distributed component of household wealth, with the bottom 90 percent of households responsible for 73 percent of total indebtedness. Wealth concentration in too few hands while the general populace is … Continue reading →

By Pam Martens: December 5, 2012 On Monday, the SEC announced it was going to study decimalization — that’s the pricing of stocks in pennies instead of using the historic practice of pricing stocks in fractions.  What the SEC really means is that it is going to study the death of IPOs on U.S. stock exchanges, how that is contributing to the death of jobs in the economy, and how all of that may rest at the doorstep of high frequency traders who remain in business only because of the pricing of stocks in pennies.  If stocks were priced in fractions, it would be far too expensive for high frequency traders to exist.  There are two words to explain this sudden exuberance by outgoing SEC Chair Mary Schapiro.  Those two words are: Grant Thornton.  The big accounting firm has been making waves with a comprehensive study on the sickly listing … Continue reading →

By Pam Martens: November 4, 2012  On December 23 of this year, the Federal Reserve will be 99 years old.  And throughout that 99 years, regardless of boom, bust, recession or Great Depression, the biggest Wall Street banks have been enjoying a 6 percent, risk-free return on the capital they hold at the Fed in the form of dividends.  Have you looked at your checking or money market bank statement lately from JPMorgan Chase or Citibank? How about the statement showing the interest you’re earning on your mortgage escrow account with the big banks? While the country suffers through the lingering effects of the Great Recession caused by the biggest Wall Street banks, the public typically receives less than 1 percent on their deposits at the big banks, while the government has legislated a permanent, risk-free 6 percent guarantee to the Wall Street banks for their capital on deposit at … Continue reading →