By Pam Martens and Russ Martens: September 27, 2016 After repeated, but ignored, warnings over the past two years from researchers at the U.S. Treasury’s Office of Financial Research (OFR), the new banking crisis has arrived with a vengeance and at a most inopportune time – when confidence is already draining from the financial system because of two U.S. presidential candidates with the highest disapproval ratings in modern history.  Yesterday, Germany’s largest financial institution, Deutsche Bank, lost 7.06 percent by the close of trading on the New York Stock Exchange. That plunge in one of the most globally-interconnected banks dragged down the shares of every major Wall Street bank yesterday: Bank of America lost 2.77 percent; Morgan Stanley declined by 2.76 percent; Citigroup lost 2.67 percent; Goldman Sachs shed 2.21 percent; and JPMorgan Chase closed down 2.19 percent. Deutsche Bank, whose shares traded at more than $120 pre-crisis in 2007, … Continue reading →

By Pam Martens and Russ Martens: September 26, 2016 Donald Trump has made a big deal about Hillary Clinton being beholden to Wall Street. That’s true. Wall Street’s mega banks and hedge funds have been major donors to Clinton’s campaign committees after showering her and Bill Clinton with millions of dollars for speeches. But Donald Trump is just as beholden to Wall Street’s mega banks because they are financing his business empire, doing so frequently behind an opaque curtain. On August 21, the New York Times ran a front-page article by Susanne Craig that pegged Trump’s business debt at $650 million. Three days later, Fortune’s Shawn Tully took a closer look and pegged Trump’s debt at $1.11 billion. According to Trump’s financial disclosure form updated in May of this year, hundreds of millions of dollars of Trump’s business debt will “mature” over the next seven years. But we don’t actually know … Continue reading →

By Pam Martens and Russ Martens: September 23, 2016 The horror stories that continue to spill out about what Wall Street banks are doing behind their cloistered walls have blurred the actual function of Wall Street: to efficiently allocate capital so that new industries can be born and thrive in America, creating new jobs and a rising standard of living for all of our fellow citizens. In the same week that the U.S. Senate Banking committee was taking testimony that one of the biggest Wall Street banks, Wells Fargo, was opening two million unauthorized customer accounts over at least a four-year span in order to generate fees and meet daily sales quotas, the Wall Street Journal reported yesterday that just 68 new companies had been listed for public trading this year, a drop of 51 percent from the 138 companies that had gone public by this time last year. Let’s … Continue reading →

By Pam Martens and Russ Martens: September 22, 2016 Yesterday the Federal Open Market Committee (FOMC) of the Federal Reserve released its policy statement, which included its announcement to stand pat on interest rates at this meeting. The third sentence of this policy statement went like this: “Household spending has been growing strongly….” To use the parlance of Wall Street, the Fed was putting lipstick on a pig. The average American might read that statement as it bounced around the newswires and conflate “household spending” with a strong consumer. Nothing could be further from the truth. Household spending data is actually capturing how Wall Street masterminds continue to fleece the 99 percent. Just six days before the FOMC policy statement was issued, this is how USA Today reported on the strength of the consumer based on the Commerce Department’s release of retail sales data: “U.S. retail sales slumped in August … Continue reading →

By Pam Martens and Russ Martens: September 21, 2016 While the U.S. Senate Banking Committee was taking testimony yesterday from the Chairman and CEO of Wells Fargo bank, John Stumpf, about his $19 million in pay last year and how Carrie Tolstedt was set to retire with $120 million from the bank, despite both of them presiding over the creation of  two million bogus bank accounts and credit cards, the Federal Reserve’s Open Market Committee (FOMC) was debating the wisdom of hiking rates and setting off a temper tantrum by Wall Street banks or standing still and losing more credibility. We will know the outcome of that conversation when the FOMC makes its announcement at 2 p.m. ET today. American banking has now evolved from too-big-to-fail to too-big-to-prosecute to too-big-and-dangerous-to-return-to-normal-monetary-policy. Since December of 2008, the Federal Reserve has held its interest rate benchmark at zero or almost zero. On December … Continue reading →

By Pam Martens: September 20, 2016 Imagine how you might feel if you were part of a distinguished family that built a respected business over 120 years only to see it gobbled up against your wishes by a banking behemoth, Wachovia, which collapsed a year later and was then forced into a shotgun wedding with another mega bank, Wells Fargo. Today, the Senate Banking Committee will put the finishing touches on this tragic tale of how a fine St. Louis family, the Edwards, lost control of their legacy of putting the customer first, to end up as part of a company now being shamed for opening two million fake accounts that were never authorized by its customers. The Edwards family story will not be part of today’s Senate hearing, but one can easily imagine that five generations of Edwards will be looking down from heaven today on the proceedings and … Continue reading →

By Pam Martens and Russ Martens: September 19, 2016 Tomorrow the U.S. Senate Banking Committee will hold a hearing to take testimony from Wells Fargo CEO John Stumpf and Federal regulators to understand how this mega bank was able to get away with opening more than two million fake customer accounts over a span of years. The accounts and/or credit cards were never authorized by the customer and were opened solely by employees to meet sales quotas, get bonuses or to avoid getting fired for failing to meet sales targets. The only reason the Republican-controlled Senate is holding this hearing is because the Wells Fargo fake-account story got a lot of coverage in the media when the Consumer Financial Protection Bureau (CFPB) announced a $185 million settlement over the charges on September 8. The reason the story got a lot of media coverage is because it’s a simple story to … Continue reading →

By Pam Martens and Russ Martens: September 16, 2016  The old adage that when one is already in a hole, one should stop digging, has apparently not found its way to the corner offices of Deutsche Bank. After a non-stop two years of scandals, the Bank has decided to take its shareholders on another heart-thumping cop car chase by publicly feuding with the U.S. Justice Department. After the Wall Street Journal reported in the wee hours this morning that the Justice Department was proposing a fine of $14 billion for Deutsche Bank’s involvement in tricking investors with toxic mortgage backed securities, the Bank had the temerity to tell Reuters that it was planning to “fight” the demand. This negotiating tactic sounds a little like something that might have been taught at the Trump Institute.  In just the past two years, Deutsche Bank, Germany’s largest bank with a large trading footprint … Continue reading →

By Pam Martens and Russ Martens: September 15, 2016 While Elizabeth Warren attempted to deliver her keynote speech at the Democratic Convention in July, which included an unabashed endorsement of Hillary Clinton after Warren had failed to endorse Senator Bernie Sanders during the critical primary campaign, chants of “we trusted you” could be heard reverberating through the cavernous hall in Philadelphia. Warren rose to fame challenging the corrupt practices on Wall Street. She was now aligned with a Presidential candidate who was using Wall Street’s ill-gotten gains from the customers they had fleeced to finance her path to the Oval Office. There is no doubt that this has caused significant cognitive dissonance among Warren’s constituents in Massachusetts’ – the landing site of the Pilgrims and one of the original 13 colonies. This bit of background might help to explain why, with less than two months before the November 8 election … Continue reading →

By Pam Martens and Russ Martens: September 14, 2016 Last Thursday the Government Accountability Office (GAO) released a report showing that since President George W. Bush left office, lawsuits by persons who were unable to obtain Federal records that they believed belonged in the public domain grew dramatically. In 2008, the last year of Bush’s presidency, 321 Freedom of Information Act (FOIA) lawsuits were filed. By 2014, that number had spiked to 434 lawsuits and registered 456 last year, an increase of 42 percent over 2008. The numbers understate the public’s frustration with Federal government stonewalling on public record requests. According to the GAO report, 713,168 FOIA requests were made by the public last year. Before one can file a FOIA lawsuit, one must file an administrative appeal with the agency that denied or partially denied the records sought. Average citizens have inadequate time and resources to engage in fighting … Continue reading →