By Pam Martens and Russ Martens: June 10, 2019 ~ On Friday markets digested the nonfarm payrolls report from the U.S. Labor Department showing a weak job growth in May of just 75,000. That news adds to a myriad of other economic data, including a slowdown in durable goods orders, that suggest a deceleration of the U.S. economy. The Atlanta Fed’s closely watched GDPNow indicator is showing a very weak 1.4 percent forecast for the second quarter of this year. The 10-year U.S. Treasury note has duly noted the deceleration in the economy and has fallen from a yield of 2.9 percent since the middle of December to 2.08 percent at Friday’s close. The yield of the U.S. Treasury has an inverse relationship to its price. That is, as the market value of the Treasury note rises, the yield declines. Thus, as the perception grows that the U.S. economy is … Continue reading →

By Pam Martens and Russ Martens: June 7, 2019 ~  Federal Reserve inspectors appear to be on some kind of mind-altering drug or their superiors are simply taking their marching orders from Wall Street cronies in the Trump Administration. Yesterday the Fed released a terse 104-word statement indicating that the largest and serially charged bank in the U.S., JPMorgan Chase, had shown “evidence of substantial improvements” in its “risk-management program and internal audit functions” and the Fed was therefore removing the dog collar it had put on the bank in January 2013. (JPMorgan Chase had been required to provide written progress reports to the New York Fed in 2013 until further notice – which became six years.) The Fed’s actions in 2013 stemmed from JPMorgan Chase secretly gambling with depositors’ money in exotic derivatives in London and losing at least $6.2 billion of those funds. The incident became infamously known … Continue reading →

By Pam Martens and Russ Martens: June 6, 2019 ~ The long-awaited final rule from the Securities and Exchange Commission called Regulation Best Interest, which grew out of the 2010 Dodd-Frank financial reform legislation and was intended to require that the nation’s stockbrokers put their clients’ interests ahead of their own, was voted on by the SEC yesterday. Three Republican Commissioners voted for it while the sole Democrat, Robert Jackson, voted against it and issued a detailed statement on why it sells out Main Street. SEC Chairman, Jay Clayton, was one of the three who voted in favor of passing the rule. Prior to joining the Trump administration as SEC Chair, Clayton was a law partner at one of Wall Street’s go-to law firms, Sullivan & Cromwell, where he had represented 8 of the 10 largest Wall Street banks within the prior three years. (See related articles below for how … Continue reading →

By Pam Martens and Russ Martens: June 5, 2019 ~ It felt like headline writers were out to engineer a stock market rally yesterday by scaring hedge funds that had shorted the market to the tune of tens of billions of dollars. When traders who are short the market act simultaneously on breaking news, (news that suggests the stock market is going to rally), by buying back stock to close out their short positions, that causes a big upward spike in the stock market. In Wall Street parlance, it’s called a short squeeze. It happens a lot in a secular bear market and is a head fake to investors desperately looking for a bullish trend. A number of major business publications put a bullish spin on what the Chair of the Federal Reserve, Jerome Powell, actually said in his opening remarks yesterday morning at a conference sponsored by the Federal … Continue reading →

By Pam Martens and Russ Martens: June 4, 2019 ~  On August 26, 2015 the market capitalization of just five Big Tech stocks totaled $1.889 trillion at the close of trading that day. Here’s the tally: Apple $625.532 billion; Google, $440.767 billion; Microsoft, $341.594 billion; Facebook, $245.795 billion and Amazon, $234.215 billion. At the close of trading yesterday, those numbers stacked up like this: Apple $797.366 billion; Google $720.206 billion; Microsoft $918.312 billion; Facebook $467 billion; and Amazon, $833.365 billion – or a total of $3.736 trillion – almost a doubling of market value in less than four years. Of particular note is that Amazon has increased its market value by more than three and a half times, despite its inability to show profits for much of its existence. In December 2013, the International Business Times reported as follows about Amazon’s abysmal history of profits: “So what’s with Wall Street’s … Continue reading →

By Pam Martens and Russ Martens: June 3, 2019 ~ U.S. Treasury Secretary Steve Mnuchin (a/k/a the former foreclosure king) has been attempting to dismantle regulatory restraints on Wall Street’s worst instincts since he took office. Making Mnuchin even more dangerous is the fact that, under statute, he simultaneously sits as head of the Financial Stability Oversight Council (F-SOC) even as he appears to be attempting to undermine financial stability in the U.S. One of Mnuchin’s most alarming actions on behalf of F-SOC came last October 17 when the Council announced that it was removing the designation of Prudential Financial as a SIFI – a Systemically Important Financial Institution that required enhanced supervision and prudential standards. Mnuchin stated at the time: “The Council’s decision today follows extensive engagement with the company and a detailed analysis showing that there is not a significant risk that the company could pose a threat … Continue reading →

By Pam Martens and Russ Martens: May 30, 2019 ~  Thanks to former FBI Director James Comey, there are now acceptable times when the 19th century word “Lordy” can be demonstrably exclaimed in public settings. For example, it can be used with pretty much anything to do with the President of the United States or, as we are now suggesting, when referring to the management of Trump’s serially-charged banking establishment, Deutsche Bank. After setting an historic intraday low of $6.82 yesterday on the New York Stock Exchange, shares of Deutsche Bank mustered a tiny rally in the last half hour of trading today to eke out a close of $6.91. Just 12 years ago, this was a $120 stock. The bank now has a market capitalization of $14.18 billion supporting assets of $1.6 trillion. (Perhaps “supporting” is not the right word. Lordy!) According to the bank’s 2018 annual report, it … Continue reading →

By Pam Martens and Russ Martens: May 30, 2019 ~ Financial media is buzzing this week that a Federal District Court Judge for the Southern District of New York, Jesse Furman, has ruled that the City of Providence, Rhode Island, the Plumbers and Pipefitters National Pension Fund, along with other plaintiffs, can move forward with their class action lawsuit against seven stock exchanges, including the New York Stock Exchange and Nasdaq, for allegations that they effectively rigged the market against the small investor. That sounds like a great David versus Goliath court case is moving right along toward a triumph for justice – until one looks at the gritty details of the case. The lawsuit was launched five years ago following the publication of the book, Flash Boys, by bestselling author and Wall Street veteran, Michael Lewis. The book mapped out, with eyewitness accounts and extensive detail, how the stock … Continue reading →

By Pam Martens and Russ Martens: May 28, 2019 ~ Simon Potter, who runs the Federal Reserve’s open market operations at the Federal Reserve Bank of New York, is stepping down at the end of this week, as is Richard Dzina, head of the New York Fed’s Financial Services Group. Wall Street is buzzing over the fact that the two are long-tenured executives at the New York Fed;  are exiting simultaneously, and with only a four-day notice to the public and the markets – suggesting that their departure may not have been voluntary. The praise lavished on the pair in the press release issued today by John Williams, President of the New York Fed, also suggests that an effort is being made to soften the blow of their surprise departure. Potter is responsible for carrying out the monetary policy mandate of the Federal Open Market Committee (FOMC) by supervising the … Continue reading →

By Pam Martens and Russ Martens: May 28, 2019 ~  Wall Street is the only industry in America that is allowed, in broad daylight, to operate its own private justice system while making its employees and customers sign binding contracts to take their complaints to that venue to seek justice. That’s like sticking your arm into the mouth of an alligator that just grabbed your purse and expecting to come out whole. Endless reports by journalists on how rigged this private justice system is have done nothing to reopen the nation’s courthouse doors to claims against Wall Street. Not only do the general counsels of Wall Street’s biggest global banks get to fashion their own system to hear claims against the banks but they get to meet in secret for two decades to strategize on other topics impacting their common interest. In 2016, Bloomberg reporters Greg Farrell and Keri Geiger broke … Continue reading →