Search Results for: JPMorgan

By Pam Martens and Russ Martens: November 23, 2015 April 18, 2000 was the day John Reed retired from Citigroup, pushed out in a board room coup, leaving Sandy Weill the sole Chairman and CEO. In 1998, the two had, with great fanfare, merged the FDIC-insured Citibank with Salomon Smith Barney, an investment bank and brokerage firm, and insurance companies controlled by Travelers Group to create the global behemoth known as Citigroup. The pair had initially served as Co-Chairmen and Co-CEOs. At the time, the deal violated the Glass-Steagall Act, the Depression era law which barred firms primarily engaged with underwriting securities to affiliate with insured banks. The Bill Clinton administration would obligingly repeal the Glass-Steagall Act the year after the Citigroup merger. At the close of trading on April 18, 2000, the day Reed stepped down, 100 shares of Citigroup were worth $6,212. Today, a decade and a half … Continue reading →

By Pam Martens and Russ Martens: November 17, 2015 Everyone has been waiting for the next shoe to drop in the Clinton cash scandals but no one expected Hillary to be the one to drop the shoe. But after making the stunning assertions in last Saturday night’s Democratic debate that most of her donors are “small” and her Wall Street spigot of funding was turned on as a result of her helping New York to rebuild after 9/11 – Hillary, the perpetual Teflon candidate, has been pummeled from Twitter to cable to mainstream media. Elizabeth Bruenig, writing for the New Republic, pointed out that “large donations make up 81 percent” of Hillary’s current campaign donations, refuting the candidate’s misstatement that “most” of her funding is from small donations. (The chart below from the Center for Responsive Politics provides the actual breakdown.) Bruenig writes further that confidence in Hillary’s assistance in … Continue reading →

By Pam Martens and Russ Martens: November 5, 2015  According to the Random House dictionary, Stockholm Syndrome is “an emotional attachment to a captor formed by a hostage as a result of continuous stress, dependence, and a need to cooperate for survival.” Regulatory capture – where big banks are actually the ones calling the shots to their regulators – appears to have morphed into Stockholm Syndrome based on a Congressional hearing yesterday.  House Financial Services Committee Chairman Jeb Hensarling dropped a bombshell on Federal Reserve Chair Janet Yellen in opening questions yesterday on the Fed’s role of supervising the largest, most systemically dangerous banks. Hensarling queried if the Fed had crossed the line from being regulator to manager. We think the question should have been has the Fed devolved from regulator to emotionally-attached hostage. (There’s plenty of evidence for the latter as we’ll explain later in this piece.) The exchange … Continue reading →

By Pam Martens and Russ Martens: November 2, 2015 Last March, Wall Street On Parade reported that the appointment calendar of Ben Bernanke during his Chairmanship of the Federal Reserve in the years of the greatest financial crash since the Great Depression, showed 84 redactions of meetings he conducted with unnamed persons between January 1, 2007 through the collapse of Bear Stearns on the weekend of March 15-16, 2008. According to the “official” record, those months were far from the core months of the financial crash, which are said to have been triggered with the collapse of Lehman Brothers on September 15, 2008 and the quick implosion of other major financial institutions that Fall. Last month, Bernanke released a 600-page tome on the crash, The Courage to Act: A Memoir of a Crisis and its Aftermath. (It’s not every day that an author credits himself with courage in a book … Continue reading →

By Pam Martens and Russ Martens: October 22, 2015  One of the common complaints heard about the U.S. financial regulatory system is that it’s so fragmented that one hand doesn’t know what the other is doing. For example, both the Office of the Comptroller of the Currency (OCC) and the Federal Reserve Board of Governors (Fed) regulate the largest banks – including the biggest banks on Wall Street. But neither of these regulators has any clarity on the securities trading risks that these banks holding trillions in insured deposits are taking. Neither does the FDIC that insures the deposits with backstopping from the taxpayer. That’s the Securities and Exchange Commission’s job. The same banks are also taking big risks in commodities and futures trading – but that’s left to the oversight of the Commodity Futures Trading Commission (CFTC). And on and on it goes. A speech given yesterday by Thomas … Continue reading →

By Pam Martens and Russ Martens: October 21, 2015 Just when you thought Wall Street’s heist of the U.S. financial system couldn’t get any crazier, along comes a regulator’s report on FDIC-insured banks exposure to derivatives. According to the Office of the Comptroller of the Currency (OCC), one of the regulators of national banks, as of June 30 of this year, Goldman Sachs Bank USA had $78 billion in deposits, and – wait for it – $45.7 trillion in notional amount of derivatives. (Notional means face amount of derivatives.) According to the OCC report, Goldman Sachs Bank USA’s notional derivatives are an eye-popping 563 percent of its risk-based capital. You and every other little guy in America are backstopping this bank because it’s, amazingly, FDIC insured. Compared to its Wall Street peers, Goldman Sachs Bank USA is a midget. JPMorgan Chase Bank NA has just shy of $2 trillion in … Continue reading →

By Pam Martens and Russ Martens: October 20, 2015  During the recent Democratic Presidential debate that aired on CNN on October 13, Senator Bernie Sanders of Vermont said: “Let us be clear that the greed and recklessness and illegal behavior of Wall Street, where fraud is a business model, helped to destroy this economy and the lives of millions of people.” Most Americans clearly understand that reality, and yet, Wall Street’s regulators continue to look the other way at the most outrageous conflicts of interest. On June 2, 2014, Wall Street’s self-policing body, FINRA, disclosed for the first time details on which publicly traded companies were being traded in dark pools and the source and volume of that trading. Dark pools are effectively unregulated stock exchanges and are operated by some of the largest commercial banks on Wall Street – which are also backstopped by the taxpayer for any losses … Continue reading →

By Pam Martens: October 19, 2015  A funny thing happened in 2012 after Andrew Ross Sorkin, a financial writer at the New York Times, wrote his spectacularly false narrative telling readers that the repeal of Glass-Steagall Act had nothing to do with the crash because problem firms like Lehman Brothers, Merrill Lynch and AIG didn’t own insured commercial banks — which would have been prohibited under the Glass Steagall Act, had it not been repealed in 1999. In fact, all three of the firms did, indeed, own banks insured by the FDIC at the time of the crash. We figured that Sorkin had just made an error, or, well, three monster errors, so we wrote to his editor. We heard nothing. We wrote to the New York Times public editor who is supposed to uphold the integrity of the paper. Nothing. We wrote to the publisher. Nothing. To this very … Continue reading →

By Pam Martens and Russ Martens: October 14, 2015 In the minds of millions of viewers, Hillary Clinton came across in last night’s Democratic debate on CNN as polished, articulate and knowledgeable about the issues. But for those of us who understand that the greatest threat to America is not some foreign power but home-grown financial terrorists wielding trillions of dollars in high-risk derivatives in taxpayer-insured banks on Wall Street, she is the same old problem, not the solution. Senator Bernie Sanders of Vermont, on the other hand, who calls himself a Democratic Socialist, was in Congress leading the fight to stop the repeal of the Glass-Steagall Act in 1999 and is still leading the charge to restore it before the next financial crash destroys what’s left of the U.S. economy. (The Glass-Steagall Act prohibits insured banks from being affiliated with high risk investment banks or stock brokerage firms.) It … Continue reading →

By Pam Martens and Russ Martens: October 12, 2015 To fully get your mind around Hillary Clinton’s new, toothless plan to “Prevent the Next Crash” on Wall Street, you need to know a few things right up front. Hillary hails not from the Democratic Party that genuinely cares about America’s staggering wealth and income inequality and the plight of the little guy, but from a grotesquely disfigured hybrid organization informally known as the “Wall Street Democrats.” In that hybrid organization, money trumps morals, duty to country and the public interest. It is a shrine to crony capitalism, infused with lawyers who believe “it’s legal if you can get away with it.” Just as Wall Street’s watchdogs suffer from regulatory capture, the Wall Street Democrats are afflicted with “cognitive capture,” a polite way of saying public officials covet the wealth they hang around with on Wall Street and expect equal earning power when … Continue reading →