Search Results for: JPMorgan

By Pam Martens and Russ Martens: January 14, 2015 JPMorgan Chase reported 2014 fourth quarter earnings this morning, missing analyst estimates. Analysts had expected $1.31 per share while the actual number came in at $1.19. Listening to the conference call this morning, there was the impression that the $1.19 would have been worse had the bank not released loan loss reserves in a number of business areas. Jamie Dimon, CEO of JPMorgan Chase, was back to characterizing the bank’s P&L as the “fortress balance sheet.” The London Whale credit derivatives traders almost blew up the fortress in 2012 and the markets are becoming skeptical as to just how much visibility there is on energy and emerging market loans souring on the books of the mega Wall Street banks. In early December, Oppenheimer analyst Chris Kotowski noted in a report that plunging oil prices could be the greatest threat to the … Continue reading →

By Pam Martens: January 12, 2015 Barry Eichengreen, Professor of Economics and Political Science at the University of California, Berkeley, has written an essential tome contrasting the Great Depression of the 1930s with the Great Recession that began in late 2007 and deepened with the collapse of iconic Wall Street firms in 2008. Aptly titled Hall of Mirrors: The Great Depression, the Great Recession, and the Uses and Misuses of History, the book walks us through ongoing events in the U.S. and Europe during both periods. Professor Eichengreen’s book is well worth reading for the mining of nuggets such as this: “Between 1933 and 1937, real GDP in the United States grew at an annual rate of 8 percent, even though government did only passably well at these tasks. Between 2010 and 2013, by comparison, GDP growth averaged just 2 percent.” In just two sentences the Professor has encapsulated the … Continue reading →

By Pam Martens: December 30, 2014 We are watching a collapse in industrial commodity prices, including crude oil. Yields on junk bonds (high yield debt) have risen dramatically. Investors have sought out the safe haven of U.S. Treasury notes, driving the yield lower as junk bond yields rise from an exit flight out of higher risk securities. The above paragraph could just as well be describing December of 2008. Unfortunately, it’s also an apt description of where we find ourselves on December 30, 2014. Aside from the irrationally exuberant U.S. stock market, there are two other serious mismatches that don’t compute between December of 2008, in the midst of the greatest financial collapse on Wall Street since the Great Depression, and December 2014. First, the publicly traded stocks of the largest Wall Street banks were in precipitous decline in late 2008, as they should have been, since rising levels of … Continue reading →

By Pam Martens: December 22, 2014 Last week members of both the House and Senate were issuing press releases to express their outrage over the sneaky repeal of a Dodd-Frank financial reform provision meant to stop giant Wall Street banks from using FDIC-insured bank affiliates to make wild gambles in derivatives, thus putting the U.S. economy in grave danger again and the taxpayer at risk for another behemoth bailout. What was the Federal regulator of these very same banks doing? It was bragging in a press release issued at the end of the same  week about the gargantuan risks these  insured banks were taking in derivatives. The press release was issued on Friday, December 19, 2014 by the Office of the Comptroller of the Currency (OCC), the regulator of all national banks which is mandated to make sure that insured banks “operate in a safe and sound manner.” The press … Continue reading →

By Pam Martens and Russ Martens: December 18, 2014 There has been much focus on the fiery speeches that Senator Elizabeth Warren delivered from the Senate floor in an effort to stop the roll-back of a key derivatives provision of the Dodd-Frank financial reform legislation that was slipped into the giant $1.1 trillion spending bill that was signed into law this week by President Obama – who campaigned for passage of the bill despite the weakening of protections against Wall Street abuses. The bill became known as the Cromnibus because it is part Continuing Resolution and part Omnibus spending bill to fund the government through September of 2015. Those who voted against the bill in the Senate are provided here; in the House, here. But Warren was far from alone in expressing outrage at Citigroup writing most of the provision  that was quietly slipped into a spending bill that was critical … Continue reading →

By Pam Martens: December 17, 2014 Wall Street On Parade holds great respect for Paul Krugman as an economist. We link regularly to his columns under our “Publisher’s Must Reads.” But every time Krugman posits on Dodd-Frank financial reform or the crash of 2008 he blunders into the quagmire created by financial reporter Andrew Ross Sorkin’s misinformation campaign in the pages of the New York Times. Take this past Monday for example. Krugman devoted his column to the spending bill just passed by Congress that guts a key derivatives provision of the Dodd-Frank financial reform legislation, writing that “One of the goals of financial reform was to stop banks from taking big risks with depositors’ money. Why? Well, bank deposits are insured against loss, and this creates a well-known problem of ‘moral hazard’: If banks are free to gamble, they can play a game of heads we win, tails the … Continue reading →

By Pam Martens and Russ Martens: December 8, 2014 On Thursday, November 20, 2014, the body of 54-year old Melissa Millan, a divorced mother of two school-age children, was found at approximately 8 p.m. along a jogging path running parallel to Iron Horse Boulevard in Simsbury, Connecticut. A motorist had spotted the body and called the police. According to the coroner’s report, it was determined that Millan’s death was attributable to a stab wound to the chest with an “edged weapon.” Police ruled the death a homicide, a rarity for this town where residents feel safe enough to routinely jog by themselves on the same path used by Millan. Information has now emerged that Millan had access to highly sensitive data on bank profits resulting from the collection of life insurance proceeds from her insurance company employer on the death of bank workers – data that a Federal regulator of … Continue reading →

By Pam Martens and Russ Martens: December 4, 2014 Yesterday, Wall Street on Parade reported on how the corrupt tentacles of Wall Street have engulfed the mindset of our newly minted law school graduates. Getting one’s resume noticed from those of a stack of competitors previously meant using a good grade ivory linen stock instead of cheap white copy paper. Today, the word is apparently out that getting one’s resume noticed at a major Wall Street bank requires advertising one’s special knack, inside track, or secret sauce for ripping off society for the profit advantage of the big dogs on Wall Street. On November 20, Senator Carl Levin and the Senate’s Permanent Subcommittee on Investigations released a 396-page report and 8-inch stack of exhibits exposing more shocking Wall Street secrets that have been heretofore protected from daylight by timid or captured regulators. Among the exhibits was a resume submitted to … Continue reading →

By Pam Martens: December 2, 2014 Yesterday, William Dudley, President of the scandalized Federal Reserve Bank of New York, cast off his Fire Warden’s helmet long enough to enthrall an audience at Bernard M. Baruch College in New York City with his soothsaying ability on economic matters. Dudley sits at the helm of the regional Fed bank that supervises the mega Wall Street banks that collapsed the U.S. economy in 2008. His ability to supervise either the Wall Street banks or his own institution has come into serious question. Recently, he told Senator Elizabeth Warren during a Senate hearing that he viewed his regulatory role over Wall Street not as a cop on the beat but “more as a fire warden,” making sure the banks don’t burn down. (Burning the country down is clearly another matter.) The U.S. Senate Subcommittee on Financial Institutions and Consumer Protection called Dudley to testify … Continue reading →

By Pam Martens: November 25, 2014 Last Thursday, the U.S. Senate’s Permanent Subcommittee on Investigations, chaired by Senator Carl Levin, released an alarming 396-page report that details how Wall Street’s too-big-to-fail banks have quietly, and often stealthily through shell companies, gained ownership of a stunning amount of the nation’s critical industrial commodities like oil, aluminum, copper, natural gas, and even uranium. The report said the scale of these bank holdings “appears to be unprecedented in U.S. history.” Adding to the hubris of the situation, the Wall Street banks’ own regulator, the Federal Reserve, gave its blessing to this unprecedented and dangerous encroachment by banking interests into industrial commodity ownership and has effectively looked the other way as the banks moved into industrial commerce activities like owning pipelines and power plants. For more than a century, Federal law has encouraged the separation of banking and commerce. The role of banks has … Continue reading →