By Pam Martens and Russ Martens: August 29, 2019 ~ Yesterday, the Dow Jones Industrial Average closed up 258 points but the yield on the 10-Year U.S. Treasury fell below 1.50 percent. In a normal market, if stocks are rallying that means there is confidence in the trajectory of economic growth in the U.S. When yields are collapsing on U.S. Treasuries, that means there is no confidence of sustained growth in the economy. So you can see why yesterday’s market activity is a serious contradiction of norms. We believe the Treasury market is already discounting (looking ahead and factoring in) what the next recession is going to look like because of constraints on how much fiscal spending the Federal government can deploy. To understand just how unprecedented the current amount of national debt is, one has to have some historical figures. At the beginning of the Bill Clinton Presidency in … Continue reading →

By Pam Martens and Russ Martens: August 28, 2019 ~ More than two dozen women who have accused Jeffrey Epstein of sexually assaulting them, most when they were underage girls, appeared in Federal Court in Manhattan yesterday. Some had their lawyers read their statement but 16 spoke on their own behalf. The theme consistent throughout their testimony is that the Justice Department must prosecute Epstein’s accomplices – anything less is a failure of justice. Two names were repeatedly mentioned by the women: Ghislaine Maxwell and Sarah Kellen. But the powerful royalty, lawyers and Wall Street titans who have been accused of being part of Epstein’s ring and participating in sexual assaults of underage girls must also be charged by the perpetually recalcitrant U.S. Justice Department. The court hearing was called at the request of Federal prosecutors in order to dismiss the case against Epstein since they can’t prosecute a dead … Continue reading →

By Pam Martens and Russ Martens: August 27, 2019 ~ Burford Capital Ltd. is a lawsuit funding company that trades on AIM, part of the London Stock Exchange’s international market for young, growing companies. Securities and Exchange Commission filings in the U.S. show tens of millions of dollars of the stock to be part of the portfolios of big-name mutual funds in the United States, despite a governance structure that takes cronyism to a whole new level. Since August 7 the stock of Burford has lost 44 percent of its value, as of intraday trading this morning. That’s the date that U.S. short seller, Muddy Waters, released a 25-page detailed and damning report on the company suggesting its accounting is Enron-esque. What stopped us in our tracks while reading the report was the paragraph revealing that the Chief Executive Officer of Burford Capital Ltd., Christopher Bogart, is married to Elizabeth … Continue reading →

By Pam Martens and Russ Martens: August 26, 2019 ~ The WeWork IPO is hype wrapped in subterfuge. It’s a money-losing commercial real estate company attempting to pass itself off as the Dalai Lama of office space rentals. The company has never made a dime of profits and its losses spiraled to $900 million in the first half of this year. Here’s a sample of the spin from its IPO prospectus: “We provide our members with flexible access to beautiful spaces, a culture of inclusivity and the energy of an inspired community, all connected by our extensive technology infrastructure. We believe our company has the power to elevate how people work, live and grow.” “We believe that individuals are more productive when they are able to express their full and authentic selves, so we aspire to be as inclusive as possible.” We’re going to have to strike out the “culture … Continue reading →

By Pam Martens and Russ Martens: August 23, 2019 ~   The WeWork IPO preliminary prospectus was filed last week with the Securities and Exchange Commission (SEC) and the company has been getting savage reviews ever since. WeWork is a commercial real estate company leasing out office space but is attempting to mesmerize the public into believing it is some genius new-age thinker. JPMorgan Securities LLC, a unit of JPMorgan Chase, and Goldman Sachs & Co. are listed as lead underwriters on the IPO. Scott Galloway, a professor at NYU’s Stern School of Business, wrote on his blog that “bankers (JPM and Goldman) stand to register $122 million in fees flinging feces at retail investors….” What has not been crystallized as yet, however, is how Jamie Dimon, Chairman and CEO of the largest bank in the U.S., JPMorgan Chase, sits smack in the middle of this mess. Dimon should definitely … Continue reading →

By Pam Martens and Russ Martens: August 22, 2019 ~ According to KPMG’s 2017 and 2018 audit of the Federal Reserve Bank of New York (New York Fed), which is just one of the 12 regional banks of the Federal Reserve System, it has provided more than half of all monies flowing to the U.S. Treasury from regional Fed banks since President Donald Trump took office. In 2017, the New York Fed shipped off $44.6 billion of the total $80.6 billion of all 12 regional banks that was remitted to the U.S. Treasury. In 2018, the New York Fed’s remittance was $33.6 billion of the total $65.3 billion from the regional Fed banks. But there was some fancy footwork in two pieces of Congressional legislation that were passed in 2018 that boosted the amount the New York Fed and other regional Fed banks would be shipping off to the Treasury … Continue reading →

By Pam Martens and Russ Martens: August 21, 2019 ~ Yesterday the Office of the Comptroller of the Currency, the regulator of national banks, and the FDIC, which provides the taxpayer-backstopped Federal insurance to deposits at these banks, announced that they were going to “simplify” the Volcker Rule. Under the Trump administration, “simplify” is code for “gut.” The Volcker Rule was part of the 2010 financial reform legislation known as Dodd-Frank. It outlawed deposit-taking banks from using those deposits to make wild gambles for the house, known as proprietary trading. It also required the banks to end their ownership of hedge funds and private equity funds where the banks can secretly dump losing positions or hide enormous losses in hard to price instruments.  Wall Street hated the Volcker Rule so much that it made sure the rule never came into being. It has stonewalled the implementation of the rule for … Continue reading →

By Pam Martens and Russ Martens: August 20, 2019 ~ Two of Wall Street’s crony regulators announced today that they are going to “simplify” the Volcker Rule’s ban on proprietary trading at Wall Street banks, providing another big win for Wall Street and another big nightmare for Main Street. The financial crash on Wall Street in 2008 was the deepest economic upheaval in the U.S. since the Great Depression. Millions of honest, hardworking Americans lost their jobs, and then their homes, as a result of the economic collapse. Many of these Americans have yet to fully recover financially after more than a decade has passed. The promise of the Obama administration was that its Dodd-Frank Wall Street Reform and Consumer Protection Act that was signed into law in 2010 would put an end to the reckless gambling casino on Wall Street that had brought on the collapse. One of the … Continue reading →

By Pam Martens and Russ Martens: August 19, 2019 ~ From 1976 to 1981, Jeffrey Epstein worked for the Wall Street investment bank, Bear Stearns. Epstein was found dead in his jail cell on August 10 while awaiting trial on charges of sex trafficking of underage girls, dozens of whom he allegedly sexually assaulted after grooming them first with “inappropriate touching.” Bear Stearns collapsed in the early days of the 2008 financial crisis and was purchased by JPMorgan Chase. One of the last acts of Bear Stearns’ CEO, Jimmy Cayne, was to make a $2 million payment to a woman who charged that the legendary Chairman of Bear Stearns, Ace Greenberg, had engaged in “inappropriate touching.” The young woman was said to have had a witness to her charges. In a 2017 report by the New York Times, a former Managing Director of Bear Stearns, Maureen Sherry, reported that “…it … Continue reading →

By Pam Martens and Russ Martens: August 16, 2019 ~ The Dow Jones Industrial Average rallied 99.97 points yesterday but the mega Wall Street bank, Citigroup, closed in the red, down 0.15 percent. That decline follows a dramatic loss of 5.28 percent on Wednesday,  a day that the Dow was down only 3.05 percent. Citigroup’s closing price yesterday was $61.32. The stock has lost more than 88 percent of its value since 2007, despite its attempt to dress up the share price with a 1-for-10 reverse stock split in 2011, which left its long-term shareholders with 1 share for each 10 shares previously held. Citi’s share price has also been dropping like a rock since July 24 of this year when it closed at $73.01. But that hasn’t triggered a rethink on the part of its competitor banks on Wall Street who have “Buy” or “Overweight” ratings on Citi’s stock … Continue reading →