Search Results for: JPMorgan

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 →

By Pam Martens and Russ Martens: October 8, 2015  Our email inbox yesterday and this morning raised more alarm bells for the mega banks – you know the ones we mean; the ones that should have been broken up before we were on the cusp of the next downturn. Here’s a quick rundown before we get into the details: Deutsche Bank announced it will take an approximate $7 billion writedown in the third quarter and potentially eliminate its dividend; Charles Schwab is out with a report on the potential for deflation and what it could do to corporate earnings; The Treasury’s Office of Financial Research released a report on big bank liquidity concerns; Bank of America released a report on the $100 billion exposure that the troubled commodities firm, Glencore, poses to global financial institutions; Bloomberg Business is reporting on the anticipated revenues downturn when big U.S. banks begin to … Continue reading →

By Pam Martens and Russ Martens: October 5, 2015  Last week we wrote about the invisible hand’s removal of a negative paragraph on the financial industry from the Pope’s speech before a joint session of Congress and some bizarre shenanigans with Fed Chair Janet Yellen’s highly anticipated speech in Amherst, Massachusetts. This past Saturday, Adam Posen, the President of a powerful think tank, the Peterson Institute for International Economics, delivered a speech at a conference sponsored by the Federal Reserve Bank of Boston, calling the U.S. Financial Stability Oversight Council (FSOC) “a mess.” That speech has gone missing from online access. FSOC is the body created under the Dodd-Frank financial reform legislation of 2010 to reassure the American people that Wall Street would never again be able to take the U.S. economy, the financial system, and the housing market to the cleaners and then get a multi-trillion dollar bailout. FSOC … Continue reading →

By Pam Martens and Russ Martens: September 28, 2015 Both Fed Chair Janet Yellen and Pope Francis delivered speeches on Thursday of last week that took an odd turn of events. A section of the Pope’s official speech transcript that slammed the finance industry was gutted before the Pope delivered his address to a joint session of Congress. In the case of Yellen, evidence strongly suggests that egregiously bad event planning sabotaged her speech at the University of Massachusetts in Amherst, triggering media hysteria and prognostications of how fast Stanley Fischer, the Fed’s Vice Chairman, would slide into Yellen’s seat as Chair of the Fed. The official transcript of the Pope’s speech to Congress appears here. It contains the following passage: “Here I think of the political history of the United States, where democracy is deeply rooted in the mind of the American people. All political activity must serve and … Continue reading →

By Pam Martens and Russ Martens: September 19, 2015 If you want to engage in a serious effort to reform Wall Street, buy two copies of economist and financial writer John Kay’s book coming out in the U.S. on Tuesday. Keep one copy of the book for yourself (share it with family and friends) and send the other copy to a member of the Senate Banking committee. That committee is highly likely to be looking at reforming Wall Street again in the near future, given the convulsions in equity, credit and commodity markets of late and an endless stream of ongoing charges of corruption against the mega banks. In his book, Other People’s Money: The Real Business of Finance, Kay demonstrates not only a sagacious understanding of the grotesque underpinnings of financial markets but he maps out a series of common sense, structural reforms to bring the financial industry back … Continue reading →

By Pam Martens and Russ Martens: September 16, 2015 Tomorrow at 2 p.m. investors worldwide will learn if the U.S. Federal Reserve has decided to cease its endless blather about its elusive plan to hike interest rates and actually boost rates from the zero bound range it has enforced since December 2008. A hike in rates will be comforting to foreign investors who rely on a strong U.S. Dollar to protect the value of investments they make in this country: investments like multi-million dollar condos in Manhattan, manufacturing plants in South Carolina, stakes in publicly traded U.S. companies, private equity funds and mega amounts of commercial real estate. A stable or rising U.S. Dollar – supported by Fed talk that the U.S. economy is growing strongly enough to withstand a rate hike – is mothers’ milk to the ears of foreign investors since it means that if they should choose … Continue reading →

By Pam Martens and Russ Martens: September 15, 2015  While the U.S. taxpayer was involuntarily shoveling over $2 trillion in bailout funds and loans into Citigroup from 2008 to 2010, the bank was committing at least one admitted felony on its foreign currency trading desk. And if ongoing testimony in a London court is to be believed, the U.S. Justice Department could have brought charges against individuals instead of settling its case for one single felony charge against the banking unit only. Citigroup’s banking unit, Citicorp, along with three other global banks (JPMorgan Chase, Barclays and RBS) admitted to a felony charge of rigging the foreign currency market brought by the U.S. Justice Department on May 20. Approximately $5 trillion in foreign currency trades are made globally each day, with billions of dollars to be made through advance knowledge of where prices will be fixed. Last Wednesday, the same day … Continue reading →

By Pam Martens and Russ Martens: September 13, 2015 Two key legal events occurred last week and were reported as separate news items when, in fact, they are highly correlated. First, the U.S. Justice Department’s Deputy Attorney General, Sally Quillian Yates, released a memo on Wednesday effectively reversing former Attorney General Eric Holder’s standard operating procedure of big money settlements on Wall Street with no individuals being charged. Yates launched the new think in a speech the next day at NYU’s School of Law – not exactly the most auspicious of venues for setting a higher moral tone. Yates lost much of her credibility in the first five minutes of her talk. First she told the audience that was packed with Wall Street’s white collar defense attorneys that in “the few years since its launch, the Program on Corporate Compliance and Enforcement has made its mark here in New York.” … Continue reading →

By Pam Martens and Russ Martens: September 10, 2015 On Monday, August 24 the Dow Jones Industrial Average plunged 1089 points within the first few minutes of trading. Close to half of that loss was recouped by the closing bell when the Dow clocked in with a loss of just 588 points. So if the small investor didn’t panic, he made out okay, right? Not necessarily. Small investors frequently have in place standing stop-loss orders that are sitting on the stock exchange order books to sell a stock at a pre-determined exit price that is lower than the current market to “stop” further losses. Once the target price of the stop-loss order is reached, the order automatically becomes a market order and is executed at where the market happens to be. In properly functioning, orderly markets, this would typically mean the stop-loss order would be executed at, or close to, … Continue reading →