By Pam Martens and Russ Martens: July 2, 2019 ~ While the Securities and Exchange Commission and Congress finesse a delicate dance around the potential criminality of Bitcoin trading and other cryptocurrencies, NYU Professor and economist Nouriel Roubini has launched a savage attack on the “currencies,” calling them “a joke,” a “scam,” a “sh*tcoin,” and no better than “cocaine drug pushers.” Not to put too fine a point on it, but Roubini is also the man who correctly called the impending financial crisis that landed in 2008 while Federal regulators wore their blinders about the corruption and leverage building inside the largest banks on Wall Street. Roubini, a long-time critic of Bitcoin, has launched his fiercest comments on cryptocurrencies in the past 24 hours on his Twitter page and in an interview on Bloomberg TV. In the Bloomberg interview, Roubini had this to say: “Crypto currencies are not even currencies. … Continue reading →

By Pam Martens and Russ Martens: July 1, 2019 ~ The current fragmented, opaque, and deeply conflicted structure of the U.S. stock market as well as the structure of the giant Wall Street banks that interact in every imaginable way with capital formation in America, is not in the public interest, the national interest or in the interest of capitalism itself. Let’s start with the structure of the stock market. Those quaint video clips that you see on television of traders mulling about on the floor of the New York Stock Exchange at 11 Wall Street in Manhattan, as executives from some new company that just listed its shares ring the bell to begin stock trading, is meant to lull the public into a sense of confidence that humans are still in charge and looking out for your retirement investments in your 401(k) or public pension plan. But 11 Wall … Continue reading →

By Pam Martens and Russ Martens: June 28, 2019 ~ How many second chances should a criminal recidivist get? JPMorgan Chase has logged in guilty pleas to three criminal felony counts in the past five years; it has a criminally-charged precious metals trader singing to the Feds currently as JPMorgan admits in regulatory filings that it’s under a new criminal investigation in that matter; the bank has paid $36 billion in fines for wrongdoing since the financial crash, including $1 billion for trading exotic derivatives in London with bank depositors’ money and losing at least $6.2 billion of those depositor funds (the London Whale scandal). And in just the past year it has proven that it’s “game on” for more regulatory fines and illicit profits. (See Could JPMorgan Chase Be Hit with a Fourth Felony Count for Rigging Precious Metals Markets?) Despite all of this, yesterday the Federal Reserve announced … Continue reading →

By Pam Martens and Russ Martens: June 27, 2019 ~ On July 18 of last year, the U.S. Department of Justice indicted two Merrill Lynch precious metals traders, Edward Bases and John Pacilio, charging them each with one count of conspiracy to commit wire fraud affecting a financial institution and one count of commodities fraud each.  Pacilio was further charged with five counts of spoofing. (Spoofing is where a trader uses a high-speed computer to issue a rapid barrage of buy or sell orders, with no intention of executing the trades, in order to mislead the market and gain an advantage for his own position in the market.) On Tuesday of this week, a unit of Merrill Lynch was given a deferred prosecution agreement in the same matter by the Justice Department in exchange for an agreement to cooperate. Merrill also agreed to pay a measly $25 million in fines … Continue reading →

By Pam Martens and Russ Martens: June 26, 2019 ~ Some decades back, the late MIT economist Lester Thurow wrote this: “Essentially, the economic problem is like that of the wolf and the caribou. If the wolves eat all the caribou, the wolves also vanish.” What Thurow did not take into consideration is that if the wolf pack is large enough, it can survive for quite a while by turning on other wolf packs. That’s what is happening right now on Wall Street. The wolves are at war with each other. The New York Stock Exchange and Nasdaq have filed a lawsuit against the Securities and Exchange Commission and are slinging mud in court at a former, long-tenured JPMorgan Chase executive, Brett Redfearn, who now polices them at the SEC. We’ll get to all that in a moment, but first some background. It all started when the stock exchanges decided … Continue reading →

By Pam Martens and Russ Martens: June 25, 2019 ~ In her 2007 book, Tulipmania: Money, Honor, and Knowledge in the Dutch Golden Age, Anne Goldgar writes that “the f1000 one might pay in January 1637 for one hypothetical Admirael van der Eyck bulb,” could have bought “a modest house in Haarlem,” or “nearly three years’ wages” of a master carpenter. Comparing that to U.S. dollars in 2007, the year her book was released, Goldgar says it would be like one tulip bulb selling for $12,000. Goldgar notes that as historians have looked back, the tulip mania of the 1630s in Holland has become a “byword for idiocy.”  She quotes from a passage written in 1648 by the historian Theodorus Schrevelius: “I don’t know what kind of angry spirit was called up from Hell…Our Descendants doubtless will laugh at the human insanity of our Age, that in our times the … Continue reading →

By Pam Martens and Russ Martens: June 24, 2019 ~ As of March 31 of this year, there were 5,362 Federally-insured commercial banks and savings associations in the United States. Just two of these banks, JPMorgan Chase NA and Citibank NA control 75.7 percent of all precious metals derivatives contracts held by all of the 5,362 Federally-insured banks and savings associations. This finding comes from a report released last week by the regulator of national banks, the Office of the Comptroller of the Currency (OCC). (See Table 9 in the Appendix of the OCC report.) Commercial banks are supposed to be making safe and sound business loans to keep the U.S. economy humming, creating good-paying jobs and making America competitive around the world. But according to the latest OCC report, of the $38.57 billion held in precious metals derivative contracts by all Federally-insured banks and savings associations in the U.S., … Continue reading →

By Pam Martens and Russ Martens: June 21, 2019 ~ On Wednesday, June 19, the House Financial Services Subcommittee on Investor Protection, Entrepreneurship, and Capital Markets held a hearing on “Putting Investors First: Examining Proposals to Strengthen Enforcement Against Securities Law Violators.” Eight pieces of draft legislation were being vetted to address critical gaps in protecting U.S. investors from financial fraud and make sure wrongdoers paid for their crimes. Despite the critical nature of the legislation to be discussed at this hearing, it received a news blackout from corporate business media, with the exception of a report that appeared in advance of the hearing by Francine McKenna of the Dow Jones news outlet, MarketWatch. We knew early on that there was going to be a big push back from Wall Street on this proposed legislation when we saw the name of one of the four witnesses scheduled to testify: Andrew … Continue reading →

By Pam Martens and Russ Martens: June 20, 2019 ~ Futures on the Dow Jones Industrial Average are up early this morning by more than 200 points. But the 10-year U.S. Treasury has also had a big rally, which dropped its yield overnight to just below 2 percent. The 10-year Note yield below 2 percent suggests a serious slowdown in the U.S. economy. That’s not something corporate stocks should be cheering about. The continuing aberrations in the U.S. stock market suggest a malfunctioning stock market structure and the first place to look is Dark Pools, which are unregulated stock exchanges run by the same mega Wall Street banks that blew up the U.S. financial system in 2008 and received the largest taxpayer bailout in U.S. history. Apparently unbeknown to the Securities and Exchange Commission (SEC), when Goldman Sachs changed the name of its big Dark Pool that trades here in … Continue reading →

By Pam Martens and Russ Martens: June 19, 2019 ~ What good is being the President of the most powerful nation on earth if you can’t humiliate people on Twitter and fire them if they refuse to do your bidding (even if the law mandates their independence from politics.) This appears to be the thinking of Donald Trump, the sitting President of the United States. The Chairman of the Federal Reserve, Jerome Powell, is the latest person to come into the President’s cross-hairs. Yesterday, Bloomberg News broke the story that “In February, the White House counsel’s office examined the legality of stripping Powell of his chairmanship and leaving him as a Fed governor.” The review of Trump’s legal options occurred “as the president repeatedly expressed public frustration with the Fed’s interest-rate increases,” according to the article. In an interview with the Washington Post last November, Trump said he was “not … Continue reading →