Category Archives: Uncategorized

By Pam Martens and Russ Martens: October 6, 2020 ~ When both parties in Congress came together in March to pass the CARES Act, which was signed into law by President Trump on March 27, the clear intention of the legislation was for the U.S. Treasury to hand over $454 billion of taxpayers’ money to the Federal Reserve. The Fed, in turn, was to leverage the money by 10 times to approximately $4.54 trillion to deploy to keep the economy moving, credit flowing, workers employed and businesses alive until the pandemic had been brought under control. Fed Chairman Jerome Powell made an unprecedented appearance on the Today show on March 26 and explained the plan like this: “In certain circumstances like the present, we do have the ability to essentially use our emergency lending authorities and the only limit on that will be how much backstop we get from the Treasury Department. … Continue reading →

By Pam Martens and Russ Martens: October 5, 2020 ~ Is the Chair of the Securities and Exchange Commission, Jay Clayton, a watchdog or a lapdog? If you judge him by his actions since taking office on May 4, 2017, it looks like the latter. That was easily predictable given that Clayton had represented 8 of the 10 largest Wall Street banks in the three years prior to taking his seat as Chair of the SEC. Clayton is also the man who is now attempting to elevate his role to that of the top criminal prosecutor in Wall Street’s home turf of Manhattan, by knocking Geoffrey Berman out of the job. That office is the U.S. Attorney’s Office for the Southern District of New York where there are pending investigations related to both Donald Trump as well as Clayton’s former clients, the big banks on Wall Street. One person in … Continue reading →

By Pam Martens and Russ Martens: October 2, 2020 ~ Yesterday, the Reuters news agency reported that a fake Russia-backed news site tied to the Internet Research Agency, the Russian group that meddled in the 2016 U.S. presidential election, has been caught in the radar of the FBI. The website is called the Newsroom for American and European Based Citizens or NAEBC. According to Reuters, the operation was created in June. It reposts content from right-wing websites as well as paying U.S. freelance writers to provide original content about politically-divisive issues. Reuters reports that “A network of accounts posing as editors and journalists then promoted the articles on social media sites favored by right-wing users.” Reuters asked the social media analytics firm, Graphika, to analyze the NAEBC website. Its spokesperson said the strategy was to “energize Trump supporters, depress support for Biden, and target both sides with divisive and polarizing … Continue reading →

By Pam Martens and Russ Martens: October 1, 2020 ~ The New York Fed, the unlimited money spigot in times of need by Wall Street’s trading houses, has been conducting meetings with hedge funds to get their input on the markets. More on that in a moment, but first some necessary background. Millions of Americans have seen the movie The Big Short, based on the Michael Lewis bestselling book by the same name. A key character in the movie is Mark Baum, played by Steve Carell. The character is based on Steve Eisman, who, during the financial crisis of 2008, was employed at FrontPoint Partners LLC, a hedge fund unit of Morgan Stanley. As widely acknowledged, FrontPoint was shorting subprime residential mortgages that were packaged into CDOs (Collateralized Debt Obligations). Shorting means to make a bet that a financial instrument will lose value. FrontPoint was, in fact, hoping American homeowners … Continue reading →

By Pam Martens and Russ Martens: September 30, 2020 ~ Conjuring up another era of “irrational exuberance,” data from Wall Street’s self-regulator, FINRA, shows that margin debt has grown by 15 percent since the end of January to a total of $645.5 billion as of August 31 of this year. That’s very close to the prior record of $668.9 billion set at the end of May 2018, according to the FINRA database. Margin debt is created when investors borrow money against their stocks (or other marginable securities) held in a margin account at a brokerage firm. Typically, the margin loan is to enable the customer to buy more stock on a leveraged basis. Under the Federal Reserve’s Regulation T, investors may borrow a maximum of 50 percent of the purchase price of stocks from their brokerage firm. The remaining 50 percent of the price of the securities must be funded … Continue reading →

By Pam Martens and Russ Martens: September 29, 2020 ~ As the attention of Americans is focused on surviving the pandemic and the pivotal presidential debate tonight, William Barr’s Justice Department decided to quietly hand an early Christmas present to a notorious Wall Street bank. Under the richly compensated leadership of Chairman and CEO Jamie Dimon, JPMorgan Chase, the largest bank in the United States, has admitted to an unprecedented five criminal felony counts since 2014 and put on criminal probation three times. Dimon notched two of those felony counts in his belt today. (That’s five felonies more than the bank pleaded guilty to in its prior 100 years of existence. Translation: this is not normal even on Wall Street.) The bank has agreed today to pay criminal fines and admit to two felony counts of wire fraud for manipulating (spoofing) trading in the precious metals and U.S. Treasury markets. … Continue reading →

By Pam Martens and Russ Martens: September 29, 2020 ~ On December 6 of last year, Bloomberg News reported that Goldman Sachs and the Justice Department were in discussions to settle criminal charges related to the 1MDB Malaysia sovereign wealth fund bribery and kickback scheme for possibly $1.5 to $2 billion. Bloomberg reporters wrote that “a settlement could be announced as soon as next month.” It’s 10 months later and there has been no such settlement with the Justice Department. So you might want to factor that into your reading of the latest reporting at Bloomberg News predicting an imminent settlement between the Justice Department and JPMorgan Chase over the bank’s role in rigging precious metals markets. (Although JPMorgan might, indeed, be eager to settle the case with this Justice Department rather than gamble on a new Justice Department under a different president.) While multiple indictments have been handed down … Continue reading →

By Pam Martens and Russ Martens: September 28, 2020 ~ The United States is a country where Americans get to select their own news reality and, with that, their own reality of the gravest threats their country is facing. If you read the New York Times, you will clearly view the President of the United States, Donald Trump, as financially compromised and the gravest national security threat the nation faces. If you are a devotee of the Rupert Murdoch empire of right-wing news (Wall Street Journal, New York Post, Fox News) you are this morning lost in a world of empty stadiums and Trump charges of “fake news.” Yesterday, the New York Times’ digital page broke the story that it had obtained from a source legally permitted to have the material, of more than two decades of Donald Trump’s tax returns. According to the Times, the returns show that in … Continue reading →

By Pam Martens and Russ Martens: September 25, 2020 ~ Fed Chair Jerome Powell looked genuinely troubled as Senator Kyrsten Sinema of Arizona shared her traumatic childhood during yesterday’s Senate Banking hearing. The witness panel included both Powell and Treasury Secretary Steve Mnuchin. Sinema first asked Mnuchin and Powell if they had ever been evicted from their home. Both said no. She then shared this: “Well, as you may know, I was homeless for a number of years as a child. And I wouldn’t wish it on anyone. I know the challenges that Arizona families are facing right now and it’s an important perspective for people here in Washington to understand. “When I was in elementary school, my Dad lost his job and my parents got divorced. We lost our car and our home and we were homeless for almost three years. We lived in an abandoned gas station without … Continue reading →

By Pam Martens and Russ Martens: September 25, 2020 ~ Refinitiv Lipper has been reporting fund flows into and out of the stock market for the past 18 years. According to its most recent report, for the week ended Wednesday, September 23, equity (stock) funds, including both equity mutual funds and equity Exchange Traded Funds (ETFs), have now seen a net outflow of money for the sixth straight week. This week’s outflow from equity funds totaled -$14.9 billion. That’s the largest outflow by far in the past six weeks. It brings the total net outflow from equity mutual funds and equity ETFs to a net outflow of $42 billion beginning with the week ending August 19. That may not sound like a lot of money in a $35 trillion (as of June 30, 2020) market, but it is if you focus on the word “net.” If you have a long-term … Continue reading →