Category Archives: Uncategorized

  By Pam Martens: June 22, 2012  Moody’s had barely published its ratings downgrades of the big banks on Wall Street before their public relations flaks hurled an avalanche of insults at Moody’s.  Citigroup was the most vitriolic of the pack, calling Moody’s “arbitrary,” “backward looking,” and “opaque.”  This from a company managed by a former hedge fund manager whose stock would be trading at $2.79 (intraday) had it not done a 1 for 10 reverse split and who previously hid tens of billions off its balance sheet in Structured Investment Vehicles (SIVs).  In fact, Citigroup wouldn’t even exist today had the taxpayer not bailed it out with $45 billion in TARP funds, over $300 billion in guarantees, and trillions in secret loans from the Fed. But Citi said in its press release: “In our view, investors and clients should make their own decisions and not rely on ratings — … Continue reading →

By Pam Martens: June 22, 2012  On June 25 and June 26, 1998, the Federal Reserve held hearings at the Federal Reserve Bank of New York on allowing Travelers Group, which owned an insurance firm (Travelers), investment bank (Salomon Brothers) and brokerage firm (Smith Barney) to merge with a bank holding FDIC insured deposits (Citicorp/Citibank). Despite solid testimony that this merger was illegal, the Fed approved the merger and Citigroup was born. Sandy Weill, head of Travelers, and Jamie Dimon, his first lieutenant (now Chairman and CEO of the risk-management-challenged JPMorgan Chase) were the brains behind the Travelers/Citicorp deal and made a fortune from it.  That merger forced all of Citigroup’s main competitors to do similar deals in order to compete, setting in motion today’s too big to fail financial chaos. Why didn’t the Fed listen to the testimony?  Why didn’t the Fed follow the law? Here’s a sampling of … Continue reading →

By Pam Martens: June 21, 2012 On this week’s Moyers & Company, Rolling Stone writer and blogger, Matt Taibbi, and Yves Smith, creator of the finance and economics blog Naked Capitalism, discuss the nexus between Wall Street and Washington and how that’s killing democracy in the U.S. Moyers will also interview Peter Edelman, who discusses what it will take to keep the needs of poor people on the American political agenda. Edelman’s new book is So Rich, So Poor: Why It’s So Hard to End Poverty in America. Watch a preview here along with a time schedule for your local PBS. In the preview you’ll hear Taibbi say “vast criminality” — Smith links CEOs and corruption — Edelman says “screwed.”  That ably sums up where we are.

By Pam Martens: June 20, 2012 The Senate Banking Committee’s subcommittee on Securities, Insurance, and Investment held a hearing from 9:30 a.m. to 11:30 a.m. this morning on a matter of national urgency: the failing process of bringing new companies to market, otherwise known as Initial Public Offerings or IPOs. The hearing was titled: “Examining the IPO Process: Is It Working for Ordinary Investors?” A more appropriate title would have been: “The Senate Hearing Process: Is It Working for the American People?” Out of an 18-member subcommittee, one Senator showed up for the hearing, Senator Jack Reed, Democrat from Rhode Island.  Calls and emails to the press offices of the other members of the subcommittee turned up only one explanation (thus far) for this embarrassing slight to the panelists and to a subject that goes to the heart of creating jobs in America and to restoring confidence in the markets … Continue reading →

By Pam Martens: June 20, 2012 The House of Representatives held a hearing at 9:00 a.m. this morning titled “Market Structure: Ensuring Orderly, Efficient, Innovative and Competitive Markets for Issuers and Investors.” The hearing was convened by the Capital Markets and Government Sponsored Enterprises Subcommittee of the House Financial Services Committee.  The panel included no one representing the public’s voice. Four of the panelists called attention to the loss of confidence that the public now has in the stock market.  Those views are in stark contrast to the perpetually repeated statement by Jamie Dimon, Chairman and CEO of JPMorgan Chase, that “We have the widest, deepest and best capital markets in the world.”  There are now 264,000 links at Google’s search engine to some variation of that statement by Jamie Dimon, e.g., “the best capital markets,” “the widest, deepest and most transparent capital markets.”  The gap between Dimon’s statement and … Continue reading →

By Pam Martens: June 19, 2012 The House Financial Services Committee was in hearing session for four hours today on JPMorgan Chase’s losses and the only thing that was materially different from last week’s Senate Banking hearing was the tie of Jamie Dimon, Chairman and CEO of JPMorgan Chase. America’s mega banks that are too big to fail are now viewed as too big to manage,  too big to regulate and the latest incarnation, too big to tell the truth to the American people for fear of a panic.  Repeatedly during the hearing today, Chairman Spencer Bachus, Republican from Alabama, interrupted fellow members of the Committee who attempted to probe the size or specifics of the losses. The impression was that a deal had been made with JPMorgan’s lawyers that these subjects would be quickly shot down by the Chair. The House Financial Services committee also heard from the siloed regulators … Continue reading →

JPMorgan Chase & Co. will present a review of second quarter results and an update on its losses in its Chief Investment Office on July 13 at 7:30 a.m. (Eastern). The presentation, including a question and answer session, are expected to conclude at approximately 9:30 a.m. (Eastern). The general public can access the conference call via the following numbers: (866) 541-2724 or (877) 368-8360 in the U.S. and Canada; (706) 634-7246 for international callers. Callers are requested to dial in 10 minutes prior to the start of the call. The live audio webcast and presentation slides will be available at www.jpmorganchase.com under Investor Relations/Investor Presentations.

By Pam Martens: June 18, 2012 Mary Schapiro, Chair of the Securities and Exchange Commission, has released her written statement for tomorrow’s hearing before the House Financial Services Committee regarding JPMorgan Chase’s losses. Based on the text, a number of problematic areas may arise for Chairman and CEO, Jamie Dimon, who signed off on the firm’s first quarter financial filings with the SEC: Was there adequate disclosure of the credit default insurance sold to hedge funds and the ensuing income the firm was receiving from this high risk source; Was the potential for losses on all synthetic credit products adequately described; Did the firm properly detail the collateral calls that could arise on these synthetic credit derivatives. Why wasn’t the change to the VAR (Value at Risk) disclosed to investors? Read the full text of the statement here.

By Pam Martens: June 18, 2012 You didn’t really think the ubiquitous U.S. Chamber of Commerce would stay quiet for long regarding the JPMorgan Chase fracas on Capital Hill did you? They’ve got a post up today at their blog comparing JPMorgan’s Chief Investment Office to getting hit by a bus.  While that’s exactly what it has felt like to shareholders who have lost a quarter of their investment in the stock since Bloomberg News first started reporting on the problem on April 5, the Chamber actually attempts to twist the bus analogy into an argument for giving JPMorgan a free hand to blow up depositors’ money as it sees fit. One suspects that someone connected to JPMorgan has asked the Chamber to trumpet a warning to frisky Congressmen on the House Financial Services Committee who will be probing Jamie Dimon, Chairman and CEO of JPMorgan Chase, tomorrow.  After the … Continue reading →

By Pam Martens: June 18, 2012 As you review the make up for the panels in these hearings, be sure to note that not one hearing has included representatives from the public or from consumer advocacy groups.  “Examining Bank Supervision and Risk Management in Light of JPMorgan Chase’s Trading Loss” House Financial Services Committee Tuesday, June 19  9:30 a.m.; 2128 Rayburn House Office Building  WITNESS LIST Panel I Thomas J. Curry, Comptroller of the Currency Mary Schapiro, Chairman, U.S. Securities and Exchange Commission Gary Gensler, Chairman, U.S. Commodity Futures Trading Commission Martin J. Gruenberg, Acting Chairman, Federal Deposit Insurance Corporation Scott Alvarez, General Counsel, Federal Reserve Board of Governors Panel II Jamie Dimon, Chairman and Chief Executive Officer, JPMorgan Chase & Co.                                ~ “Market Structure – Ensuring Orderly, Efficient, Innovative and Competitive Markets for Issuers and Investors” House of Representatives Financial Services’ Subcommittee on Capital Markets and Government Sponsored Enterprises … Continue reading →