Search Results for: Janet Yellen

By Pam Martens and Russ Martens: October 18, 2019 ~ Shhh! Don’t tell Congress that the Federal Reserve is back to electronically creating money out of thin air to throw at a liquidity problem (of an, as yet, undetermined origin) on Wall Street. And be sure not to mention that the Fed’s balance sheet has shot up in a period of just 42 days by $253 billion. And, of course, don’t remind Congress that before the last Wall Street crisis was over the Fed had secretly, with no oversight from Congress, piled up a $29 trillion tab to bail out Wall Street — a fact it fought years in court to keep under wraps. On September 4, 2019, the Fed’s assets on its balance sheet stood at $3.761 trillion. As of October 16, that figure is $4.014 trillion, edging closer to the $4.5 trillion peak it reached in 2015 following the … Continue reading →

By Pam Martens and Russ Martens: October 9, 2019 ~ Yesterday, at a speaking event in Denver at the National Association of Business Economists, Federal Reserve Chairman Jerome Powell acknowledged that a larger, long-term bailout of Wall Street is coming. His two key points were buried in a subterfuge of puffery but came across loud and clear: “…my colleagues and I will soon announce measures to add to the supply of reserves over time.” And this: “As we indicated in our March statement on balance sheet normalization, at some point, we will begin increasing our securities holdings to maintain an appropriate level of reserves. That time is now upon us.” Let that final statement sink in for a moment. Under the previous Federal Reserve Chair, Janet Yellen, balance sheet normalization at the Federal Reserve meant reducing the Fed’s unprecedented $4.5 trillion balance sheet to get back to something near pre-crisis levels. … Continue reading →

By Pam Martens and Russ Martens: June 3, 2019 ~ U.S. Treasury Secretary Steve Mnuchin (a/k/a the former foreclosure king) has been attempting to dismantle regulatory restraints on Wall Street’s worst instincts since he took office. Making Mnuchin even more dangerous is the fact that, under statute, he simultaneously sits as head of the Financial Stability Oversight Council (F-SOC) even as he appears to be attempting to undermine financial stability in the U.S. One of Mnuchin’s most alarming actions on behalf of F-SOC came last October 17 when the Council announced that it was removing the designation of Prudential Financial as a SIFI – a Systemically Important Financial Institution that required enhanced supervision and prudential standards. Mnuchin stated at the time: “The Council’s decision today follows extensive engagement with the company and a detailed analysis showing that there is not a significant risk that the company could pose a threat … Continue reading →

By Pam Martens and Russ Martens: May 23, 2019 ~ U.S. Treasury Secretary Steve Mnuchin appeared yesterday before the House Financial Services Committee. You know it was a bad day for the Secretary when the low point was not Congressman Stephen Lynch’s request to the Chair, Maxine Waters, to have Mnuchin held in contempt for not following the statute that calls for the IRS to turn over tax returns on any American when requested by an authorized Committee of Congress. Mnuchin has said he will not turn over the tax returns of the President of the United States, which are under subpoena by Congress. (The Internal Revenue Service, which holds these tax returns, is an agency of the U.S. Treasury.) Waters said she will seek the advice of the Committee’s counsel on the contempt request. A number of Democratic members of the Committee intensely questioned Mnuchin on  his myriad deregulatory … Continue reading →

By Pam Martens and Russ Martens: June 27, 2018 ~  Despite President Donald Trump’s leanings toward authoritarianism, he is likely to learn a hard truth this year and next – that the Federal Reserve can make or break his presidency by delivering up to three different gut punches to the markets, which are very likely to spill over into the economy. And without a good economy, even Trump’s most fervent supporters may begin to doubt his omnipotence. For starters, next Monday the Federal Reserve is scheduled to shrink its purchases of U.S. Treasury securities and Federal agency debt and mortgage-backed securities by another $10 billion a month, from a shrinkage of $30 billion to $40 billion. And by October 1 of this year, the Fed will move from draining $40 billion a month from the markets to draining $50 billion, according to its previously announced schedule. (See chart below.) At … Continue reading →