Search Results for: JPMorgan

By Pam Martens: March 27, 2014 It only took three press releases over as many days but the Federal Reserve finally spit out the truth yesterday on its stress tests of the big banks: Citigroup, the largest bank bailout recipient of 2008, still doesn’t have its house in order more than five years later. How many more years of economic malaise will it take before the delusional Fed admits to the public that only the restoration of the Glass-Steagall Act, separating banks holding insured deposits from gambling casinos on Wall Street, will put our financial system back on sound footing? The Fed’s comments on Citigroup yesterday included the following: “While Citigroup has made considerable progress in improving its general risk-management and control practices over the past several years, its 2014 capital plan reflected a number of deficiencies in its capital planning practices, including in some areas that had been previously … Continue reading →

By Pam Martens: March 26, 2014 There’s a few Golden Rules that most Wall Street traders intuitively know never to cross: “Don’t fight the Fed,” “Cut your losses short and let your profits run,” “Never pick a fight with people who buy ink by the barrel,” and the one coined just last week: “Don’t bet against the folks with a military budget larger than the next ten biggest spenders combined.” Of course, traders have egos and can sometimes forget the basics. The London Whale traders at JPMorgan elected not to cut their losses short and let them run to $6.2 billion, which led to press ink by the barrel, multiple Congressional hearings, indictments of traders, a $920 million settlement by JPMorgan and the trials have yet to start. Now, once again, it seems that common sense has escaped the Masters of the Universe on Wall Street. Last Tuesday, Jay Carney, … Continue reading →

By Pam Martens: March 18, 2014 In case you haven’t figured it out yet, there is a right way and a wrong way to help yourself to other people’s money on Wall Street. The right way propels you into the one percent replete with mansions and yachts, your name memorialized on buildings, a golden parachute, an office and car for life fronted by defrauded shareholders and regular invitations to appear on CNBC and lecture others on how to structure the financial system. Then there’s the wrong way – as Gary Foster found out the hard way in June 2012 when he was sentenced to eight years in the slammer for embezzling more than $22 million from Citigroup and compounding his lack of etiquette in the most unforgiveable fashion – he wired the funds to Citigroup’s arch rival, JPMorgan Chase. Foster broke multiple etiquette rules for stealing money on Wall Street. … Continue reading →

By Pam Martens and Russ Martens: March 10, 2014 It’s been over five years since the collapse of iconic Wall Street firms such as Bear Stearns and Lehman Brothers; the insolvency and bailout of AIG and Citigroup; the receivership of Fannie Mae and Freddie Mac; the shotgun marriage of Bank of America and Merrill Lynch. After a 5-year delay, the Federal Reserve has released the full transcripts of its meetings in 2007 and 2008 – the two key years of the crisis. But for unexplained reasons, the Fed Chairman, Ben Bernanke continues to redact 84 meetings from his appointment calendar that occurred between January 1, 2007 and the pivotal collapse of Bear Stearns on the weekend of March 15-16, 2008. At first blush, one might think that Bernanke is attempting to protect the image of the Chairman of the Federal Reserve Board of Governors as independent of any political influence … Continue reading →

By Pam Martens: February 18, 2014 Yesterday, the UK’s Serious Fraud Office brought criminal charges against three more individuals in the matter of rigging the interest rate benchmark known as Libor. But the sum total of what we learned about those charges from the Serious Fraud Office are the following two sentences: “Criminal proceedings by the Serious Fraud Office have commenced today against three former employees at Barclays Bank Plc, Peter Charles Johnson, Jonathan James Mathew and Stylianos Contogoulas, in connection with the manipulation of LIBOR.  It is alleged they conspired to defraud between 1 June 2005 and 31 August 2007.” There was no formal criminal complaint released to the press; no smoking gun emails; no transcripts of collusion in chat rooms. Just the above two sentences. In the U.S., we are certainly not getting financial crimes by the big banks under control any better than the UK but at … Continue reading →

By Pam Martens: February 5, 2014 Yesterday, Martin Wheatley, the Chief Executive of Britain’s top financial regulator, the Financial Conduct Authority (FCA), testified before Parliament’s Treasury Select Committee that the public has valid reasons not to trust the way that rates are set in the foreign currency exchange markets “because of what they’ve seen and the stories that they’ve seen come out.” Global investigators have accumulated evidence that strongly suggests that traders at the too-big-to-fail banks have been rigging foreign exchange rates in much the same manner that they rigged the interest rate benchmark, Libor. Unfortunately for the public, Wheatley said it is likely that the investigation will drag into 2015, meaning the public will just have to go on not trusting a marketplace that trades $5.3 trillion a day. (Is this any way to run a global financial system or have we permanently entered the Alice in Wonderland world … Continue reading →

By Pam Martens: February 3, 2014 In a span of four days last week, two current executives and one recently retired top ranking executive of major financial firms were found dead. Both media and police have been quick to label the deaths as likely suicides. Missing from the reports is the salient fact that all three of the financial firms the executives worked for are under investigation for potentially serious financial fraud. The deaths began on Sunday, January 26. London police reported that William Broeksmit, a top executive at Deutsche Bank who had retired in 2013, had been found hanged in his home in the South Kensington section of London. The day after Broeksmit was pronounced dead, Eric Ben-Artzi, a former risk analyst turned whistleblower at Deutsche Bank, was scheduled to speak at Auburn University in Alabama on his allegations that Deutsche had hid $12 billion in losses during the … Continue reading →

By Pam Martens: January 23, 2014 Politico’s Ben White appears to have joined the Maria Bartiromo be-kind-to-Wall-Street camp. Bartiromo lectured fellow participants on Meet the Press last September that “We need to get beyond the conversation of is Wall Street evil.” (Perhaps the statement should be phrased: “Wall Street needs to stop being evil so we can get beyond that conversation.”) White took it one step further last week, suggesting in a column that Wall Street is fully reformed and no longer dangerous, thanks to those omnipotent folks in the Nation’s capitol whose financial reforms have gotten Wall Street purring like a kitten. In a piece preposterously titled “How Washington beat Wall Street,” White writes that “In 2009, Washington went to war against big Wall Street banks hoping to blow up the kind of high-risk, high-reward strategies that helped spark the financial crisis. Five years later, that war is largely … Continue reading →

By Pam Martens: January 16, 2014 There was a distinct chill in the air yesterday as questioning got underway in the U.S. Senate’s hearing on whether the Wall Street mega banks that caused the greatest economic collapse since the Great Depression from 2008 through 2010 should be allowed to effectively control the price of aluminum and other metals by owning metal warehouses and creating bottlenecks in delivery; or allowed to own oil pipelines, terminals and tankers while trading trillions of dollars a year in oil futures – potentially rigging that market against the consumer. It’s not that there’s limited evidence that these firms will rig markets. These are the same firms that are serially charged and pay enormous fines for fraud and cartel-like behavior. Traders even refer to themselves as “The Cartel” and “The Bandits’ Club” in chat rooms. The hearing was called by Senator Sherrod Brown, Chair of the … Continue reading →

By Pam Martens: January 15, 2014 U.S. Senator Sherrod Brown, Chair of the Subcommittee on Financial Institutions and Consumer Protection, part of the Senate Banking Committee, will hold a hearing today at 2:00 p.m. on “Regulating Financial Holding Companies and Physical Commodities.” This will be the second time in six months that the U.S. Senate has investigated the alleged rigging of these markets by Wall Street firms as the Federal Reserve, the sole regulator to grant Wall Street the power to push into these markets, fails to take action to repeal its orders and asks for public comment through March 15, after which time it will study the problem some more. In his written testimony submitted to the Committee, on which he will take questions today, Norman Bay, Director of the Office of Enforcement at the Federal Energy Regulatory Commission (FERC), cited examples of fraudulent activity by Deutsche Bank, Barclays, … Continue reading →