By Pam Martens and Russ Martens: January 4, 2017 Over the span of the last two weeks, President-elect Donald Trump’s U.S. Treasury Secretary nominee, Steven Mnuchin, has been the subject of multiple, scathing investigative reports by the media; earned a web site established by Senate Democrats dubbing him the “Foreclosure King” and soliciting complaints from the public; garnered a television ad campaign directed against him; and has been skewered by a devastating document leaked by someone currently or formerly connected to the California State Attorney General’s Office, indicating that the bank Mnuchin ran from 2009 to 2015, OneWest, repeatedly violated California foreclosure law, including backdating documents and making illegal bids, in order to throw thousands of vulnerable people out of their homes. Mnuchin is also a former Goldman Sachs partner and hedge fund operator who has never held public office before. His rapid rise to nominee for one of the … Continue reading →

By Pam Martens and Russ Martens: January 3, 2017 Just 17 days from today, Donald Trump will be sworn in as the nation’s 45th President and deliver his inaugural address. Trump is expected to announce priorities in the areas of education, infrastructure, border security, the economy and curtailing the outsourcing of jobs. But Trump’s agenda will be derailed on all fronts if the big Wall Street banks blow up again as they did in 2008, dragging the U.S. economy into the ditch and requiring another massive taxpayer bailout from a nation already deeply in debt from the last banking crisis. According to a report quietly released by the U.S. Treasury’s Office of Financial Research less than two weeks before Christmas, another financial implosion on Wall Street can’t be ruled out. The Office of Financial Research (OFR), a unit of the U.S. Treasury, was created under the Dodd-Frank financial reform legislation … Continue reading →

By Pam Martens and Russ Martens: December 30, 2016 We have noticed throughout this past year that when the Standard and Poor’s 500 index of stocks sold off, big banks’ share prices sold off by dramatically more on a percentage basis. Yesterday, notwithstanding the big rally bank stocks have enjoyed since Donald Trump’s win on November 8, the big banks once again dramatically outpaced the S&P 500 on the downside. The S&P lost 0.03 percent while the major Wall Street banks like Citigroup, Goldman Sachs, Morgan Stanley and Bank of America lost over 1 percent. It was a worthwhile reminder that the hurdles the big banks have experienced this year have not diminished – by any means. As 2016 began, the big, globally-interconnected Wall Street banks were facing serious headwinds. The Fed had just hiked rates and oil prices could not find a floor and neither could the share prices … Continue reading →

By Pam Martens and Russ Martens: December 29, 2016 Typically, it takes two to settle bank fraud charges – the bank committing the fraud and the law enforcement agency bringing the charges. But in the case of the announcement late last Thursday evening that Deutsche Bank and the U.S. Justice Department had reached an agreement to settle claims against the bank for allegedly swindling investors in the sale of toxic residential mortgage backed securities, all that could be heard was the sound of one hand clapping in a press release issued by the defendant, Deutsche Bank. Nowhere to be found was a statement of particulars on what the bank was admitting to or a man behind a podium bearing the seal of the U.S. Justice Department in a press briefing room, as typically occurs in a real settlement. The lack of substantive details to this “settlement” and no confirmation from … Continue reading →

By Pam Martens and Russ Martens: December 28, 2016 Each quarter the Office of the Comptroller of the Currency (OCC) releases a detailed report showing the exposure to derivatives at U.S. banks. The most recent report for the quarter ending June 30, 2016 indicates that U.S. bank holding companies have a total notional amount (face amount) of derivatives of $252.6 trillion. Of that total, just five Wall Street banks hold $230 trillion or 91 percent, underscoring how massively concentrated this high risk game has become. Those five banks are: Citigroup, JPMorgan Chase, Goldman Sachs Group, Bank of America and Morgan Stanley. There are numerous U.S. units of foreign banks on the derivatives list of bank holding companies but one name is conspicuously missing: the German giant, Deutsche Bank. Without knowing how much potential exposure U.S. banks have to Deutsche Bank in the derivatives arena, the U.S. public is left completely … Continue reading →

By Pam Martens and Russ Martens: December 27, 2016 In 1934 the U.S. had 14,146 commercial banks holding insured deposits. By 1985, that number had barely budged, standing at 14,417. Then came the Bill Clinton administration in the 1990s and its reckless and unprecedented banking deregulation which allowed the giant Wall Street banks to swallow up, or drive out of business, thousands of banks across America. According to the Federal Deposit Insurance Corporation (FDIC), as of December 22 of this year, there are only 5,927 FDIC insured banks left in the U.S., a stunning decline of 59 percent from 1985. But those numbers are just the tip of the iceberg. Banking concentration in the U.S. has reached an unprecedented crisis level when it comes to deposits. Out of the dramatically shrunken base of 5,927 FDIC insured banks which were holding a total of $11.2 trillion in total deposits (insured and … Continue reading →

By Pam Martens and Russ Martens: December 21, 2016 Donald Trump is increasingly looking like Wall Street’s back up plan in the event that the Wall Street Democrats didn’t triumph in the 2016 election. Trump has appointed two Goldman Sachs alumni and the current President of Goldman Sachs to top posts in his administration. On Monday, Trump announced that Vincent Viola, a billionaire who spent the bulk of his adult life trading oil and gas futures on Wall Street, would become Secretary of the Army – at a time when tens of thousands of service members rely on food pantries to get by. Forbes reports this about how Viola gets by: “Viola owns a 20,000-square-foot townhouse on the Upper East Side of Manhattan, near Central Park. In December 2013 he listed the home — complete with a giant red bow tied across its facade — for a staggering $114 million. … Continue reading →

By Pam Martens and Russ Martens: December 20, 2016 Something smelled unusually rotten in Trumpland when Democratic Senator from New York Chuck Schumer fell all over himself to endorse Donald Trump’s nominee, Vincent Viola, as Secretary of the Army. Viola has never served in battle and has spent the bulk of his adult life as an oil and gas futures trader. He became a billionaire from his stake in a high frequency trading firm, Virtu Financial, which he took public last year. Multiple media outlets reported that Viola was a donor to Donald Trump’s campaign. According to Federal Election Commission (FEC) records, however, Viola’s only Federal election contribution in the past two years was a $5,000 donation to the CME Group Pac in December 2015. Raising further questions about what is actually going on here, Virtu Financial’s CEO, Douglas Cifu, was a major donor to Hillary Clinton’s campaign, giving $10,000 … Continue reading →

By Pam Martens and Russ Martens: December 19, 2016 Nobel Laureate Paul Krugman is raising a question in the pages of the New York Times this morning that has been on the minds of Europeans since Donald Trump won the U.S. presidential election on November 8: has America fallen? Krugman’s column came two days after we had heard the following story from a friend: a few days after the November 8 election, a young man in his twenties got into a cab in New York City heading for John F. Kennedy International Airport. The cabbie asks why the young man is leaving. The student explains that he has been attending a university in New York City but his parents in Germany had called and ordered him to come home immediately. Their exact statement to him was: “leave immediately, America has fallen.” What could cause this kind of reaction from parents … Continue reading →

By Pam Martens and Russ Martens: December 16, 2016  On December 6, the Gallup organization together with the U.S. Council on Competitiveness published a jolting study demonstrating that the pervasive sense among Americans that the U.S. is in economic decline isn’t imagined. It’s real and it’s dangerous. The study was conducted by Gallup’s Senior Economist, Jonathan Rothwell, with other Gallup experts and external scientists serving as reviewers to “ensure statistical and theoretical accuracy and objectivity,” according to Gallup Chairman and CEO Jim Clifton. The problem, in a nutshell, is this: real Gross Domestic Product (GDP) per capita ran at a rate of 2.4 percent per year from 1929 to 1979. But since 2007, real GDP per capita has been a negligible 1 percent. Since the depths of the Wall Street crash in 2009, it has been a paltry 1.4 percent. (GDP per capita is the value of all goods and … Continue reading →