Category Archives: Uncategorized

By Pam Martens and Russ Martens: August 23, 2022 ~ Caitlin Long is the founder and CEO of a crypto startup called Custodia Bank, previously known as Avanti Financial Group. Custodia is allowed to call itself a “bank” – despite the fact that it does not have FDIC insurance on deposits – because of a 2019 law in Wyoming that allows Custodia to operate as a Special Purpose Depository Institution (SPDI). The lack of federal insurance on bank deposits and Wall Street’s wild speculations are what led to thousands of banks going belly up following the 1929 stock market crash. Wyoming has become to crypto what the state of Delaware is to corporate secrecy – a very friendly venue. Since 2018, Wyoming has passed a flurry of laws to effectively roll out the red carpet to crypto startups and their army of lobbyists. The University of Wyoming even offers a Minor … Continue reading →

By Pam Martens and Russ Martens: August 22, 2022 ~ Last week the Federal Reserve announced that it was banning Ronald D. Paul for life from the banking industry. Paul is the former Chairman and CEO of EagleBank, a small bank operating 20 offices in Maryland, Washington, D.C. and Virginia. The Fed also announced it was fining EagleBank $9.5 million for violating the Board’s “insider lending regulation,” over EagleBank extending “credit totaling nearly $100 million to entities that Paul owned or controlled, including certain family trusts, without making appropriate disclosures….” This is just one more case of the Federal Reserve going after the little fish while taking a hands-off approach to the killer whales – the megabanks on Wall Street. For more than a decade, JPMorgan Chase has been asserting in its proxy statement that its entire Board of Directors, other than Jamie Dimon, consists of independent directors. In its most … Continue reading →

By Pam Martens and Russ Martens: August 18, 2022 ~ The narrative that the FBI took the unprecedented step of raiding former President Donald Trump’s “home” on August 8 has misdirected the media debate that should be happening right now. The majority of Americans hear the word “home” and think of a private residence where one family resides. But the property raided on August 8 by the FBI was Mar-a-Lago – which has as much resemblance to a private residence as Palm Beach International Airport has to a private airplane hangar. Yes, it’s true that there are private quarters located at Mar-a-Lago for Trump and his family. But it’s also true that this is a 114-room oceanfront resort and hotel that sells memberships, rents hotel rooms and suites, and holds a multitude of events. The official website for Mar-a-Lago explains its event offerings as follows: “Important occasions call for settings that … Continue reading →

By Pam Martens and Russ Martens: August 17, 2022 ~ After crypto has blighted trust in the financial landscape of the United States and left tens of thousands of Americans as victims of theft, or locked out of access to their money, the Federal Reserve has finally found the courage to take on the loud-mouthed crypto hawkers and issue a warning. The Fed sent a letter yesterday to supervisory staff at its 12 regional Federal Reserve banks and to all Fed member banks. The letter started out with a curious sentence (potentially crafted to assuage the loud-mouthed crypto hawkers which include a significant number of right-wing members of Congress on the Senate Banking and House Financial Services Committees which oversee the Fed). The sentence read: “The emerging crypto-asset sector presents potential opportunities to banking organizations, their customers, and the overall financial system…” (Italics added.) The word “opportunities” typically suggests that something of … Continue reading →

By Pam Martens and Russ Martens: August 15, 2022 ~ Last Thursday evening, Justice Department Attorney General, Merrick Garland, held a brief press conference to announce that he had asked a federal court to unseal the search warrant and inventory receipts filed in connection with the FBI’s search of Donald Trump’s Palm Beach oceanfront home and beach resort, Mar-a- Lago. As part of his statement to the press, Garland said this: “Faithful adherence to the rule of law is the bedrock principle of the Justice Department and of our democracy. Upholding the rule of law means applying the rule of law evenly, without fear or favor.” Unfortunately, the vast majority of Americans believe there is one set of laws for the rich and powerful and another set of laws for average Americans. According to a Gallup poll released on July 5, only 14 percent of Americans had “a great deal” or … Continue reading →

By Pam Martens and Russ Martens: August 15, 2022 ~ This past Friday, five state-owned companies in China announced that they would apply this month to delist their shares from the New York Stock Exchange. The companies plan to continue trading in Hong Kong and mainland China. The companies include the large oil company Sinopec; China Life Insurance; Aluminum Corporation of China; PetroChina; and Sinopec Shanghai Petrochemical Company. It is highly likely (and long overdue) that more Chinese share delistings on U.S. exchanges will follow. For the past two decades, China has been stonewalling U.S. regulators over access to the work papers of auditors of publicly traded companies that are based in China but listed on U.S. stock exchanges. China takes the position that these audit work papers hold state secrets and it prohibits audit firms from releasing the documents directly to U.S. regulators, effectively flouting U.S. accounting law. This untenable situation … Continue reading →

By Pam Martens and Russ Martens: August 11, 2022 ~ At his July 27 press conference, Fed Chair Jerome Powell said this: “Households are generally in about as strong a financial shape as they’ve been in a very long time – or perhaps ever given the money that’s on people’s balance sheets. So you have a pretty – from a financial stability standpoint – you have a pretty decent picture.” That statement captures a rear view mirror look at U.S. households. The picture is deteriorating rapidly. More on that in a moment, but first a look at some hair-raising charts that capture the dire straits of U.S. households during the 2008-2010 financial crisis versus today. The New York Fed released its Household Debt and Credit Report for the second quarter of 2022 last week. It showed total household debt rising by $312 billion in the second quarter to reach an historic high … Continue reading →

By Pam Martens and Russ Martens: August 10, 2022 ~ On August 4, Goldman Sachs provided the following disclosure when it filed its quarterly report (10-Q) with the Securities and Exchange Commission: “The firm is cooperating with the Consumer Financial Protection Bureau in connection with an investigation of GS Bank USA’s credit card account management practices, including with respect to the application of refunds, crediting of nonconforming payments, billing error resolution, advertisements, and reporting to credit bureaus.” That bland statement doesn’t really do justice to the hundreds of complaints filed with the Consumer Financial Protection Bureau (CFPB) by consumers using the Apple credit card that is provided by Goldman Sachs. The Apple credit card holders are alleging being put through a living hell by Goldman Sachs when fraudulent charges are made on their Apple credit card and a host of other problems. In typical Goldman Sachs style, it has managed to … Continue reading →

By Pam Martens and Russ Martens: August 9, 2022 ~ The Federal Reserve recently released its 2021 Annual Report. We decided to peruse its wonky pages. We came upon a passage that gave us pause. It read: “As of year-end 2021, a total of 135 foreign banks from 48 countries operated 144 state-licensed branches and agencies, of which 6 were insured by the FDIC, and 50 OCC-licensed branches and agencies, of which 4 were insured by the FDIC… Altogether, the U.S. offices of these foreign banks controlled approximately 17 percent of U.S. commercial banking assets.” The FDIC (Federal Deposit Insurance Corporation) is a federal agency. Its federal deposit insurance is backstopped by the U.S. taxpayer. Why should U.S. taxpayers be insuring foreign bank deposits in the U.S. – especially since federal regulators cannot even provide adequate oversight of domestic megabanks? We knew that big foreign banks like Barclays, UBS, Deutsche Bank, … Continue reading →

By Pam Martens and Russ Martens: August 8, 2022 ~ The Fed is doing something it’s never been allowed to do in its 109 years of operation. And, it’s doing it without any pushback from Congress. The Fed draws its statutory authority from the Federal Reserve Act of 1913 which created the Fed’s “discount window” for making loans to Fed member banks which are engaged in making loans for “agricultural, industrial or commercial purposes….” The Federal Reserve Act strictly prohibited the Fed from making loans “for the purpose of carrying or trading in stocks, bonds, or other investment securities….” After Wall Street trading casinos blew up the U.S. economy in 1929 and brought on the Great Depression of the 30s, Congress enacted the Glass-Steagall Act in 1933 which established federal deposit insurance for commercial banks and outlawed the merger of those federally-insured banks with Wall Street trading casinos (investment banks and … Continue reading →