By James A. Kidney: August 30, 2018 ~ (Editor’s Note: James Kidney was a trial attorney at the SEC for 25 years until his retirement in 2014.) As the nation approaches the 10th anniversary of the demise of Lehman Brothers, which is popularly pegged as the beginning of the Great Recession, one is struck by the current events that tie back to the world-wide financial crisis of a decade ago. John McCain again is in the headlines, this time more sadly, as he was when he made a Hail Mary move by temporarily “suspending” his presidential campaign to address the financial crisis — an ill-considered action he came to regret. Big Wall Street banks are as up to their necks in risky derivatives, as in 2008. Once again, the political powers are reveling in a long bull market and listening to wealthy bankers proclaim a pressing need to be relieved … Continue reading →

By Pam Martens and Russ Martens: August 29, 2018 ~ Yesterday, President Donald Trump accused Google in a Tweet of rigging its search results to suppress the “voices of Conservatives.” That’s the same complaint that the secretive Charles Koch network of super wealthy political operatives have been attempting to address with media front groups for more than a decade. Trump now appears to be using his bully pulpit in an effort to legitimize those Koch-funded media outlets. The billionaire fossil fuels magnate, Charles Koch, has a lot of balls in the air right now and some are at risk of falling to earth with a thud. He’s currently in a battle to beat out the National Republican Committee (RNC) as the go-to guy for voter database, data mining and targeted social media ads in the midterms and all future elections. (See our report: Koch Industries Is Staffing Up with Voter … Continue reading →

By Pam Martens and Russ Martens: August 28, 2018 ~ It’s not every day that one sees the names Democratic Senator Elizabeth Warren and Republican Senator John McCain as the leading co-sponsors on the same piece of legislation. But that’s exactly what happened on July 11, 2013, two years later on July 7, 2015,  and again last year on April 6. Together with Maria Cantwell (D-Washington) and Angus King (I-Maine), the four last year re-introduced the 21st Century Glass-Steagall Act, an updated version of the Banking Act of 1933, which was also known as the Glass-Steagall Act. Senator McCain passed away on August 25, without seeing the passage of the legislation. If enacted, the legislation would separate traditional banks that hold deposits that are insured by the Federal Deposit Insurance Corporation (FDIC) – and ultimately backstopped by the U.S. taxpayer – from the investment banks on Wall Street that underwrite … Continue reading →

By Pam Martens and Russ Martens: August 27, 2018 ~ The Kansas City Fed’s annual symposium in Jackson Hole is typically a dry affair with central bankers and economists expounding on theories that are incomprehensible to the average working person — whose focus is on making their monthly mortgage payment, saving for their children’s college tuition and building a nest egg for retirement. This past weekend’s event, however, produced one highly relevant paper for the average Joe. Professor Antoinette Schoar of the Massachusetts Institute of Technology (MIT) spoke on the effect of investments by “JP Morgan Chase, Citi, Goldman Sachs and Bank of America into AI [artificial intelligence], machine learning and big data,” stating that their investments are “a multiple of all other banks.” Schoar warned that the “emergent Fintech technologies” that result from these large investments “might in fact reinforce concentration in the industry given the enormous economies of … Continue reading →

By Pam Martens and Russ Martens: August 24, 2018 ~ The media’s focus on President Donald Trump currently revolves around whether he is or is not an unindicted co-conspirator in criminal campaign finance fraud following that implication by prosecution documents and his former lawyer, Michael Cohen, in Federal court testimony on Tuesday. Democrats want congressional hearings to gather more evidence while Republican leaders are simply ducking press interviews. The graver risk to the country, however, may stem not from whether Donald Trump is a crook but whether he is suffering from narcissistic personality disorder, a condition with the potential to elevate to dangerous psychotic behavior. Last year, 27 psychiatrists and mental health experts assessed Donald Trump’s behavior in the book The Dangerous Case of Donald Trump.  One of the most revealing articles came from Dr. Craig Malkin, Ph.D., a clinical psychologist, lecturer for Harvard Medical School, and author of the … Continue reading →

By Pam Martens and Russ Martens: August 23, 2018 ~  The Dodd-Frank financial reform legislation was signed into law on July 21, 2010 as the U.S. was still reeling from the aftermath of the epic 2008 Wall Street crash and economic meltdown. In addition to giving the Federal Reserve enhanced powers to supervise the behemoth bank holding companies on Wall Street, Section 1108 created a new position on the Board of Governors of the Federal Reserve. The legislation reads: “The Vice Chairman for Supervision shall develop policy recommendations for the Board regarding supervision and regulation of depository institution holding companies and other financial firms supervised by the Board, and shall oversee the supervision and regulation of such firms.’’ The President of the United States was mandated to fill this slot and the Fed’s Vice Chairman for Supervision was to give semi-annual testimony to the Senate Banking and House Finance Committees. Under … Continue reading →

By Pam Martens and Russ Martens: August 22, 2018 ~  The fact that the President’s former attorney, Michael Cohen, pleaded guilty yesterday to an array of fraud charges and fingered the President as an unindicted co-conspirator in campaign finance fraud, which dominated cable news last night for a non-stop six hours, has failed to get front-page placement in newspapers across rural America. This news censorship may explain why suburban and urban voters give such a low approval rating to Donald Trump while rural voters continue to give the President high marks. Rural voters are simply being starved of important national news by their local newspapers. Consider the stark difference in reporting between the digital front pages of big city papers and their rural peers this morning: The New York Times leads today with the headline Cohen Pleads Guilty, Implicating President. The Washington Post has this: Cohen pleads guilty, implicates Trump in … Continue reading →

By Pam Martens and Russ Martens: August 21, 2018 ~ The Chairman of the Federal Reserve, Jerome Powell, is slated to deliver a speech on Friday morning at an annual symposium in Jackson Hole, Wyoming. President Donald Trump has made it known that he wants some economic help from the Fed in terms of keeping interest rates low. Speaking of Powell directly, Trump told Reuters yesterday: “I’m not thrilled with his raising of interest rates, no. I’m not thrilled.” All eyes on Wall Street will be watching for any hints in Powell’s speech that he’s sending a message to Trump that he won’t be taking any loyalty oath to the President. But aside from possible coded messaging to Trump to take his jackboot off the Fed’s turf, there are other important reasons to pay attention to the Jackson Hole gathering. It’s called the Federal Reserve Bank of Kansas City’s Economic … Continue reading →

By Pam Martens and Russ Martens: August 20, 2018 ~ Last Thursday the Securities and Exchange Commission (SEC) issued a statement regarding a new $10.5 million fine against Citigroup. The statement read: “Citigroup’s lax supervision and weak internal accounting controls allowed a handful of rogue traders to mismark positions over several years and, separately, resulted in the unnecessary loss of hundreds of millions of dollars of its shareholders’ assets to fraud.” Lax supervision, weak accounting controls, and losing hundreds of millions of dollars to fraud are not words the American taxpayer wants to be reading about Citigroup in 2018. This is the very same bank that received the largest bailout by the U.S. taxpayer in global banking history following its implosion during the Wall Street crash of 2008 due to grossly faulty internal controls. The reason that Citigroup was bailed out while Lehman Brothers was left to fail was that, … Continue reading →

By Pam Martens and Russ Martens: August 17, 2018 ~ August 16, 2018 will be remembered as the day there was a collective awakening by America’s media that there was something intrinsically and morally and constitutionally wrong with not just the functioning of the President of the United States – but with America itself. In response to an August 10 appeal from the Boston Globe to newspaper editorial boards around the country to write and publish their thoughts on Trump’s “dirty war against the free press,” more than 300 newspapers responded yesterday. The Globe’s own editorial yesterday contained one of the most poignant phrases, stating that the President tosses out lies about the media “much like an old-time charlatan threw out ‘magic’ dust or water on a hopeful crowd.” You can read the coast-to-coast outpouring of editorials on what a free press means to democracy here. One of the most … Continue reading →