By Pam Martens and Russ Martens: March 6, 2017 Commander-in-Tweet Donald Trump has potentially dug a deep hole for himself. By publishing a Tweet over the weekend stating that President Obama had tapped his phones during the Presidential election campaign, Trump has simultaneously suggested that a Foreign Intelligence Surveillance Act court (FISA court) found sufficient evidence to warrant a wiretap. (The wiretap would have been at the behest of an intelligence agency, not President Obama directly.) Chuck Todd, host of Sunday’s Meet the Press, summed up the mess as follows on his program yesterday: “It’s such a serious allegation. I mean it is either, if it’s true, it’s an extraordinary political scandal. And if it’s not true, it’s an extraordinary political scandal.” It should be noted that if it’s not true, it would be not so much a political scandal as it would be another in a long, long series … Continue reading →

By Pam Martens and Russ Martens: March 1, 2017 In President Trump’s speech last evening to a joint session of Congress, he described his plan to rebuild America’s crumbling infrastructure as follows: “To launch our national rebuilding, I will be asking the Congress to approve legislation that produces a $1 trillion investment in the infrastructure of the United States — financed through both public and private capital — creating millions of new jobs.” Financed through “both public and private capital” sounds a lot like a public-private partnership.  Here’s how those hybrid creatures have worked out so far for the American people. Fannie Mae and Freddie Mac were, effectively, public-private partnerships. (The government preferred to call them “Government Sponsored Enterprises” or GSEs.) Each company traded on the New York Stock Exchange and each company had private shareholders. Because Fannie and Freddie had a line of credit from the U.S. Treasury and … Continue reading →

By Pam Martens and Russ Martens: February 28, 2017 PwC, formerly known as PricewaterhouseCoopers, is one of the Big Four accounting firms created in 1998 from the merger of Price Waterhouse and Coopers & Lybrand. Its namesakes are more than a century old. Unfortunately, PwC will henceforth be known as the accounting firm that provided presenters Warren Beatty and Faye Dunaway with the wrong red envelope at Sunday night’s Oscars. That mistake created a chaotic scene where two producers of the film “La La Land” were initially allowed to give speeches on stage for Best Film, then stunned with the news that “Moonlight” had actually won the award. At one point, producers and casts of both films stood in dazed confusion on the stage. According to the official report thus far, a PwC partner, Brian Cullinan, mistakenly handed the Best Actress award envelope (Emma Stone for “La La Land”) to … Continue reading →

By Pam Martens and Russ Martens: February 27, 2017 Warren Buffett, the CEO of Berkshire Hathaway, authors an annual letter to shareholders that receives wide media coverage for the nuggets of wisdom dispersed to the masses. His latest letter, released on Saturday, trumpets American exceptionalism, the miraculous market system Americans have created, while it blithely dismisses the greatest wealth and income inequality in America since the 1920s. Buffett preposterously observes that “Babies born in America today are the luckiest crop in history.” Let’s start with that last statement. According to our own Central Intelligence Agency, there are 55 countries that have a lower infant mortality rate than the United States. Even debt-strapped Greece beats the United States. Much of what Buffett has to say in this letter sounds like unadulterated propaganda to reassure the 99 percent that his amassing of a net worth of $76.3 billion was a result of … Continue reading →

By Pam Martens and Russ Martens: February 24, 2017  The biggest banks on Wall Street, both foreign and domestic, have been repeatedly charged with rigging and colluding in markets from New York to London to Japan. Thus, it is natural to ask, have the big banks formed a cartel to rig the prices of their own stocks? This time last year, Wall Street banks were in a slow, endless bleed. The Federal Reserve had raised interest rates for the first time since the 2008 financial crisis on December 16, 2015 with strong hints that more rate hikes would be coming in 2016. Bank stocks never do well in a rising interest rate environment because their dividend yield has to compete with rising yields on bonds. Money gravitates out of dividend paying stocks into bonds and/or into hard assets like real estate based on the view that it will appreciate from inflationary forces. … Continue reading →

By Pam Martens and Russ Martens: February 23, 2017 On September 8, 2016, the Consumer Financial Protection Bureau (CFPB) fined Wells Fargo $185 million following an investigation that found that its employees had engaged in a widespread practice of “secretly opening unauthorized deposit and credit card accounts” in order to meet sales quotas or qualify for bonuses. An estimated 2 million accounts were involved. One month later, the Chairman and CEO of Wells Fargo, John Stumpf, was gone. Consider that swift action to acknowledge and punish egregious abuse of clients with how the Boards of Directors of JPMorgan Chase and Citigroup have responded to criminal felony charges and seemingly endless regulatory fines for abusing clients’ trust. The Boards have kept their CEOs in place, paid the monster fines and moved on to the next settlement. Jamie Dimon became the CEO of JPMorgan Chase on January 1, 2006. At that point, … Continue reading →

By Pam Martens and Russ Martens: February 22, 2017 President Trump’s nominee to head the Securities and Exchange Commission, Walter J. (Jay) Clayton, a law partner at Sullivan & Cromwell, has represented 8 of the 10 largest Wall Street banks as recently as within the last three years. Clayton’s current resume at his law firm is somewhat misleading. It lists under “Representative Engagements” in “Capital Markets/Leveraged Finance” the following: Initial public offering of $25 billion by Alibaba Group Holding Limited; Initial public offering of $190 million by Moelis & Company; Initial public offering of $2.375 billion by Ally Financial. All three of the above IPOs occurred in 2014 – less than three years ago. A quick check of the prospectuses for the IPOs that were filed with the Securities and Exchange Commission shows that Clayton, as a law partner at Sullivan & Cromwell, was representing the underwriters in the offering, which include the largest … Continue reading →

By Pam Martens and Russ Martens: February 21, 2017 There’s a very old joke on Wall Street that goes like this: “How do you make a small fortune on Wall Street? Answer: Start with a large one.” Unfortunately, millions of Americans have discovered since 2008 that this is no laughing matter. There are now more than 1,000 articles on this website that address the failure of our Congress and regulators to rein in the serial and frequently, conspiratorial, abuses of Wall Street against the investing public. There are brilliantly written books on the fleecing and insatiable greed of Wall Street; there are movies and documentaries on how Wall Street’s reign of financial terror brought the U.S. to the brink of financial collapse in 2008. And yet, the public continues to play the role of sucker at the big trading houses on Wall Street. Just last week the Securities and Exchange … Continue reading →

By James A. Kidney: February 20, 2017 The Trump administration assault on investor protections put in place following the 2007-08 financial crisis continues apace.  The war on investors takes place in arenas both large and small. The large issues get the attention, of course.  These include repeal of much of the Dodd-Frank law and regulations of the biggest Wall Street banks, limiting or eliminating the Consumer Financial Protection Bureau, which actually helps individual customers abused by giant financial institutions, and preventing adoption of fiduciary standards for financial professionals recommending securities that line their pockets but are risky to customers. But Washington is not merely a swamp of self-interest with large, highly visible alligators munching on small fish to satisfy their insatiable greed.  Another apt metaphor is a field of giant weeds — weeds of rules, processes and procedures that can be manipulated for the interests of the Fat Cats. These … Continue reading →

By Pam Martens and Russ Martens: February 17, 2017 It was Tuesday, August 6, 1974. New evidence had surfaced showing that the President of the United States, Richard Nixon, had lied to the nation about his knowledge of the Watergate burglary and attempted coverup. Senator Barry Goldwater blurted out in frustration at a Republican luncheon: “There are only so many lies you can take, and now there has been one too many. Nixon should get his ass out of the White House — today!” The next day, Goldwater led a delegation of Republican leaders to the White House. They told Nixon he had lost the confidence of his party; he did not have the votes in the House to ward off impeachment or the votes in the Senate to avoid conviction. The very next day, Thursday, August 8, 1974, Nixon addressed the nation and announced his resignation as President. One … Continue reading →