Search Results for: Janet Yellen

By Pam Martens and Russ Martens: December 27, 2017 During Fed Chair Janet Yellen’s press conference on December 13, she had this to say about financial stability on Wall Street: “And I think when we look at other indicators of financial stability risks, there’s nothing flashing red there or possibly even orange. We have a much more resilient, stronger banking system, and we’re not seeing some worrisome buildup in leverage or credit growth at excessive levels.” Where does Fed Chair Janet Yellen get her information on financial stability risks to the U.S. financial system? A key source for that information is the Office of Financial Research (OFR), a Federal agency created under the Dodd-Frank financial reform legislation of 2010 to keep key government regulators like the Federal Reserve informed on mounting risks. On December 5, the OFR released its Annual Report for 2017. It was not nearly as sanguine as … Continue reading →

By Pam Martens and Russ Martens: November 9, 2017 In November of 2016, there was more than 100 basis points (one percent) difference between the yield on the 2-year and the 10-year U.S. Treasury Note. As of this morning, that difference stood at 68 basis points, a dramatic flattening in the yield curve and harkening to the levels seen during the onset of the financial crisis in 2007. As of 7:48 a.m. this morning, the spread between the 10-year Treasury Note (yielding 2.33 percent) and 30-year Treasury Bond (yielding 2.81 percent) is even smaller, at a meager 48 basis points or less than half of one percent. It is a serious commentary on the bizarre financial times in which we live that a fixed income investor would be rewarded with less than half a percent of additional income to add 20 years of risk to the maturity date on his … Continue reading →

By Pam Martens and Russ Martens: July 12, 2017 When members of the U.S. House Financial Services Committee question Fed Chair Janet Yellen this morning following her testimony on monetary policy, many Republicans on the panel will be posturing for their money masters who fund their political campaigns rather than asking questions that benefit the average American. You can tell that there has been a Koch Network-corporate takeover of the House Financial Services Committee by the statement that its Chairman, Jeb Hensarling, plastered on the front page of the Committee’s web site following the heroic actions of the Director of the Consumer Financial Protection Bureau, Richard Cordray, on Monday. Cordray reopened the nation’s courts to millions of Americans who have been the victims of predatory actions by the banks that fund Hensarling’s seat in Congress. On Monday, Cordray went up against the most powerful players on Wall Street and the … Continue reading →

  By Pam Martens and Russ Martens: July 7, 2017 Sometimes a picture really is worth a thousand words. The charts above show how four of the largest Wall Street banks traded like clones of one another yesterday. Their share prices rallied at almost identical times and the rallies faded at almost identical times. The chart contrasting the trading pattern of JPMorgan Chase and Morgan Stanley is particularly interesting. JPMorgan’s Chase bank has thousands of retail commercial bank branches spread across the United States. Morgan Stanley, on the other hand, has approximately 17,000 retail stockbrokers, now known as financial advisors. What both firms have in common is that they are among the five banks in the country that control a monster pile of derivatives on Wall Street. Ditto for the other two banks illustrated above: Citigroup and Bank of America. According to the most recent data from the Office of … Continue reading →

By Pam Martens and Russ Martens: July 6, 2017 According to the Federal Deposit Insurance Corporation (FDIC), as of March 31, 2017 there were a total of 5,856 banks in the U.S. operating under its Federal deposit insurance umbrella. But according to government financial researchers, five of those banks pose an ongoing material threat to the U.S. financial system. Not surprisingly, those five banks hold insured deposits for savers while simultaneously engaging in highly leveraged, high risk trading on Wall Street. On June 27, Janet Yellen, the Chair of the U.S. Federal Reserve (the nation’s central bank) spoke at an event at the British Academy in London. She stated the following about the U.S. financial system: “Would I say there will never, ever be another financial crisis? You know probably that would be going too far, but I do think we are much safer, and I hope that it will … Continue reading →

By Pam Martens and Russ Martens: February 14, 2017  Today’s news headlines are not the stuff of confidence-building. It seems like a 241-year old democracy should have gotten its act together a lot better by now. Bloomberg News is reporting that 17 of the most prestigious colleges and universities in the country (including Harvard, Yale and Stanford) have filed court papers seeking to join a lawsuit in a Brooklyn Federal court against President Donald Trump’s hastily constructed Executive Order. The Order called for an immigration ban which has drawn a flurry of lawsuits, nationwide protests and a rebuke by the Ninth Circuit Court of Appeals. The schools told the court that during the last academic year, more than one million international students studied at U.S. universities and now, as a result of the immigrant ban, 42,000 scholars, including Nobel Laureates, are calling for a boycott of educational conferences in the … Continue reading →

By Pam Martens and Russ Martens: September 30, 2016 One day after Federal Reserve Chair Janet Yellen failed to reassure the House Financial Services Committee that too-big-to-fail banks no longer pose a threat to the U.S. financial system, the stock market settled the debate. Germany’s largest bank had a dizzy spell and Wall Street banks swooned under a collective anxiety attack. The writing has been on the wall for a very long time that this scenario was going to eventually play out given the lack of serious reform of Wall Street. What was notable about yesterday’s market activity is that among the major Wall Street banks, Goldman Sachs fared worst, falling 2.75 percent, followed by Morgan Stanley which shed 2.30 percent and Citigroup, which lost 2.28 percent. All of the major Wall Street banks were dragged down by the 6.67 percent decline in the shares of Deutsche Bank by the … Continue reading →

By Pam Martens and Russ Martens: September 21, 2016 While the U.S. Senate Banking Committee was taking testimony yesterday from the Chairman and CEO of Wells Fargo bank, John Stumpf, about his $19 million in pay last year and how Carrie Tolstedt was set to retire with $120 million from the bank, despite both of them presiding over the creation of  two million bogus bank accounts and credit cards, the Federal Reserve’s Open Market Committee (FOMC) was debating the wisdom of hiking rates and setting off a temper tantrum by Wall Street banks or standing still and losing more credibility. We will know the outcome of that conversation when the FOMC makes its announcement at 2 p.m. ET today. American banking has now evolved from too-big-to-fail to too-big-to-prosecute to too-big-and-dangerous-to-return-to-normal-monetary-policy. Since December of 2008, the Federal Reserve has held its interest rate benchmark at zero or almost zero. On December … Continue reading →

By Pam Martens and Russ Martens: June 29, 2016  Today, at 4:30 p.m., the Federal Reserve is scheduled to release the second leg of its annual stress tests of 33 banks holding $50 billion or more in total consolidated assets. The first leg of the tests was released last Thursday with all 33 banks getting a passing grade in terms of meeting the minimum capital cushion required. Today’s final round, called the Comprehensive Capital Analysis and Review (CCAR), will determine whether the banks are allowed to continue or increase dividend payments, conduct share buybacks or issue secondary stock offerings. This is the sixth annual round of stress tests conducted by the Fed since the financial crash in 2008. In addition to the regular stress tests, eight large banks with significant trading and/or clearing operations are required to show losses if a major counterparty defaulted. Those banks are: Bank of America, … Continue reading →

By Pam Martens and Russ Martens: June 23, 2016 Millions of Americans think that Congressional Republicans are in conspiracy with groups like the U.S. Chamber of Commerce, Cato Institute, Koch brothers, and the Mercatus Center to advance an agenda of increasing corporate profits while sacking the needs of the poor and middle class. That doesn’t mean, however, that Republicans can’t sometimes spot a conspiracy on the part of others. Yesterday, four Republicans on the House Financial Services Committee, during the semi-annual monetary policy testimony by Fed Chair Janet Yellen, presented a persuasive argument that it’s really the Federal Reserve (which was flattered by many House Democrats at the hearing) that’s sacrificing the poor and middle class in order to benefit the rich and “the Goldman Sachs CEOs of the world.” Congressman Ed Royce, Republican from California, said that he was “concerned that the Federal Reserve has created a third pillar … Continue reading →