Search Results for: JPMorgan

By Pam Martens: November 21, 2013 Just when it seemed one could no longer be shocked by the corruption, hubris and lack of accountability in the American financial system, along comes yesterday’s release of the Federal Reserve’s minutes for the October 29-30 meeting of its Federal Open Market Committee (FOMC). While mainstream media focuses on what the minutes revealed about when the Fed might begin to reduce its monthly $85 billion in bond purchases, receiving scant attention is a brazen power grab boldly stated on page two of the eleven pages of minutes. Back on October 31, wire services reported that the temporary dollar and foreign currency swap lines that had been put in place between central banks on a temporary basis during the financial crisis had been turned into standing arrangements. The Associated Press explained the action as follows: “Six of the world’s leading central banks, including the U.S. … Continue reading →

By Pam Martens: November 14, 2013 The Federal Reserve system turns 100 this coming December 23. Today, for the first time, a woman will undergo a Senate confirmation hearing to lead the Fed – an historic first. But gender is the last thing on anyone’s mind today when it comes to the new Fed Chairman. The Republicans are simmering over what they feel are “easy money” policies at the Fed. Wall Street will be measuring every syllable for a hint of when the Fed’s cash punchbowl of $85 billion a month in bond purchases might end. A few Democrats will delicately quiz Yellen on her views on ending too big to fail banks. What is very unlikely to emerge amid the theatrics in the Senate Banking confirmation hearing this morning, is the most basic question of all: how did a 100-year old institution created to implement independent monetary policy in … Continue reading →

By Pam Martens: November 12, 2013 President Obama is about to do it again – appoint one of those revolving door Wall Street lawyers to head a critical top post at one of Wall Street’s key regulators. This time it’s the Chair of the Commodity Futures Trading Commission (CFTC). According to multiple leaks in the business press today, this afternoon the President will nominate Timothy Massad to head the CFTC – a man who spent 27 years at Cravath, Swaine & Moore, a core part of Wall Street’s legal muscle. Massad is not coming directly from Cravath this time around. On June 30, 2011, Massad was confirmed by the U.S. Senate to serve as the Department of Treasury’s Assistant Secretary for Financial Stability. If confirmed to head the CFTC, Massad will play a critical role in the regulation of derivatives, an area that has received heavy pushback from his former … Continue reading →

By Pam Martens: November 11, 2013 It’s time to visit the musty shelves of those rare book stores and ferret out a copy of Charles Mackay’s Extraordinary Popular Delusions and the Madness Of Crowds, or simply buy a reprinted version. Mackay’s book was first published in 1841and takes a hard look at greed-based manias like the tulip bubble in Holland in the 1600s and the South Sea bubble in the early 1700s. At the peak of the tulip bubble in 1637, it is reported that a single tulip bulb sold for many times the annual wage of a skilled laborer. The South Sea bubble was built around the British South Sea Company which seduced investors with the vision of great wealth from trade with South America. The company’s share price collapsed in the early 1700s, seriously impacting the British economy. Subsequent investigations revealed bribes and trading manipulations to pump up … Continue reading →

By Pam Martens: November 7, 2013 In recent months we’ve learned that the National Security Agency (NSA) has been spying on tens of millions of law-abiding citizens’ emails and telephone calls placed through companies like Google, Yahoo, Verizon, AT&T and Sprint Nextel. What the NSA does not appear to have been spying on are the Bloomberg chat rooms where real financial frauds involving potentially trillions of dollars in trades have been occurring for years. Now, the ultimate embarrassment has occurred for those sleuths at the NSA. The Wall Street Journal is reporting that investigators probing a new line of market manipulation, rigged foreign currency trading, have found that potential lawbreakers were so cavalier about their conduct that they used chat names such as “The Bandits’ Club” and “The Cartel.” On December 20, 2012, we reported that the Bloomberg chat room was the brand choice for traders plotting to rig the … Continue reading →

By Pam Martens: November 6, 2013 Public Advocate, Bill de Blasio, running on the Democratic ticket, won a landslide victory for New York City Mayor last evening, beating his Republican challenger, Joe Lhota, 73.3 percent to 24.3 percent with 99.7 percent of the vote counted thus far. The landslide victory is a harsh rebuke to the current billionaire Mayor, Michael Bloomberg, who used his enormous wealth to overturn the previous two-term limit, giving himself an extra four years in office. It is also a long in the making victory for those who believe Bloomberg’s 12 years in office ushered in a merciless gilded age, bestowing benefits on the rich and Wall Street elite while savaging the poor and middle class, and silencing dissent with brutal police force. The Republican choice of Joseph (Joe) Lhota demonstrated the tone-deaf quality of the party bosses in New York. Lhota had a 14-year Wall … Continue reading →

By Pam Martens: October 30, 2013 The trial of five former employees of Bernard Madoff’s Ponzi operation is currently playing out in Manhattan as the U.S. Justice Department weighs bringing charges against JPMorgan Chase, where Madoff had his primary business banking account, for ignoring flashing red lights that a fraud was taking place. According to lawsuits filed by Irving Picard, the Trustee handling the Madoff recovery fund, JPMorgan knew that Madoff was supposed to be engaged in managing stock portfolios for hundreds of clients. JPMorgan even created structured investments that allowed investors to make leveraged bets on the returns achieved by Madoff. But the Madoff business bank account that JPMorgan Chase oversaw, showed billions of dollars in cash being wired in and out but no payments ever going to any party engaged in processing or clearing a stock trade. Under Wall Street’s Know Your Customer Rule, the activity in the … Continue reading →

By Pam Martens: October 18, 2013 The Wall Street Journal is running a titillating headline this morning, “Prosecutors and SAC Head Toward a Possible Record-Breaking Settlement.” CounterPunch is running my cheerless headline this morning, “It’s Now Official: New York is Drowning in Bribes and Corruption.” There’s an intellectual junction between the two stories. The Obama Justice Department, ensconced with partners from the law firm, Covington & Burling, which helped Big Tobacco hide the dangers of smoking for decades, believes in this formula: money = justice. Thus, SAC Capital Advisors LP, the hedge fund charged with securities fraud and encouraging a culture of insider trading, is rumored to be about to offer up more than $1 billion to settle its charges. That follows on the heels of the $1 billion and counting that JPMorgan Chase has recently paid to settle a mountain of charges of wrongdoing. There’s said to be many … Continue reading →

By Pam Martens: October 10, 2013  Before Wall Street took a bazooka loaded with credit default swaps and toxic mortgage securitizations and fired it directly at the heart of the U.S. economy, we had a very stable banking system. In the five years before the 2008 crash, only 10 banks failed in the United States. Let me repeat that: ten banks went belly up in the entire period between January 2003 through December 2007.  Since January 2008 through today, the Federal Deposit Insurance Corporation shows 487 banks have failed, with 22 failures just so far this year. With an average of two bank failures per year in the five years before the crash, that means banks are still failing at 10 times the pre-crash rate. But the numbers get worse from there.  While the FDIC shows 487 banks have failed, other data at the FDIC show that a total of 1,306 … Continue reading →

By Pam Martens: October 8, 2013 Last week, Ryan Chittum, writing for the Columbia Journalism Review, unleashed the simmering disgust of hundreds of editors and reporters across America: why won’t former Chairman and CEO of AIG, Maurice (Hank) Greenberg, just shut up and go to trial on his eight year old charges of engaging in accounting fraud at his former company. He’s now on his third New York State Attorney General who has valiantly tried to let this case see the sunshine of a jury trial. What Greenberg has done instead is to pay the law firm of superlawyer David Boies to motion our courts to death while his army of pr flacks try his case on CNBC and in the opinion pages of the Wall Street Journal. Greenberg’s latest soiree into fantasy land came in an October 2 piece in the Wall Street Journal where Greenberg empathized out loud … Continue reading →