By Pam Martens and Russ Martens: April 12, 2016 Economist Paul Krugman has repeatedly attempted to recast the 2008 Wall Street collapse as triggered by shadow banks rather than the biggest banks on Wall Street. Krugman refuses to let the facts on the ground get in his way. (Later in this article, we’ll produce a document to show just how ridiculously off base Krugman really is.) On December 14, 2014 Krugman wrote in his column at the New York Times: “In fact, I’d argue that regulating insured banks is something of a sideshow, since the 2008 crisis was brought on mainly by uninsured institutions like Lehman Brothers and A.I.G.” Apparently, Krugman, like his colleague Andrew Ross Sorkin, is ignorant of the fact that both Lehman Brothers and AIG owned FDIC-insured banks at the time of their failure, backstopped by the U.S. taxpayer. (When Wall Street On Parade asked the Public … Continue reading →

By Pam Martens and Russ Martens: April 11, 2016  Chapman Cubine Adams + Hussey, the official direct mail marketing firm for the Democratic National Committee (DNC), which currently has two Presidential contenders – one of whom, Bernie Sanders, has won seven of the last eight state races – is overtly putting its finger on the scale for Hillary Clinton. Senator Bernie Sanders of Vermont announced his candidacy in April 2015, but in the photo above, posted to the official Facebook page of Chapman Cubine, its President, Kim Cubine, appears with Hillary Clinton and calls her the “future President.” Another Facebook post by Chapman Cubine on March 16 celebrates Hillary Clinton’s win in the South Carolina primary. (See graphic below.) Kim Cubine and two of her partners at Chapman Cubine (Lon Chapman and Jim Hussey) show up in Federal Election Commission (FEC) records as individual donors to Hillary Clinton’s campaign and … Continue reading →

By Pam Martens and Russ Martens: April 8, 2016  Yesterday Senators Elizabeth Warren and Sherrod Brown sent a letter to U.S. Treasury Secretary Jack Lew, asking him to investigate potential U.S. involvement in the money laundering issues recently exposed by the leak of the Panama papers from the law firm, Mossack Fonseca. The Senators told Lew: “The Justice Department is reportedly reviewing this matter to determine whether there may be ‘high-level, foreign corruption that might have a link to the United States or the U.S. financial system.’ But, as the primary agency charged with protecting the integrity of the U.S. financial system and enforcing our laws against money laundering and terrorist financing, we strongly urge the Treasury Department to conduct its own inquiry into Mossack Fonseca’s activities and its clients.” According to journalists who have seen the documents that were leaked by an unknown source, there were 617 “banks, law … Continue reading →

By Pam Martens and Russ Martens: April 7, 2016  If anyone needs one more reason to break up the mega banks on Wall Street, simply look at what happened following the Federal Reserve’s quarter of a percentage point rate hike on December 16 of last year. On that date, the Fed moved off its seven year zero interest rate policy (ZIRP), which had been a bonanza for the banks and a starvation plan for seniors living on fixed income investments like Treasury notes and CDs, and raised its benchmark rate by a quarter of a percentage point to between 0.25 percent and 0.50 percent from its former 0.0 to 0.25 percent. The following then happened in short order in 2016: By Friday, January 15, Citigroup closed down on the day a gut-churning 6.41 percent, bringing its share price losses to a whopping 30 percent from its July 2015 high. Citigroup … Continue reading →

By Pam Martens and Russ Martens: April 6, 2016  According to ABC exit polls, Senator Bernie Sanders big win of 56.5 percent to Hillary Clinton’s 43.1 percent in the Democratic primary yesterday in Wisconsin was fueled by voters belief in his honesty, his ability to inspire and confidence that he can improve the economy. But the very day that Sanders should be enjoying that big win, the New York Daily News has seen fit to devote its full front cover of today’s newspaper to shaming Sanders. What did Sanders do to infuriate the New York Daily News? Absolutely nothing. The newspaper has twisted an interview its editorial board conducted with Sanders on April 1 into a pretzel to come up with a headline screaming that Sanders “callously defends gunmakers” against the relatives of the victims of the Sandy Hook school shooting, who are attempting to sue the gun manufacturer for … Continue reading →

By Pam Martens and Russ Martens: April 5, 2016 At the Democratic debate at Drake University in Des Moines, Iowa on November 14, 2015, Hillary Clinton attempted to portray herself as the fierce enemy of hedge funds. She told the audience the following: “You have two billionaire hedge fund managers who started a Super PAC and they’re advertising against me in Iowa as we speak. So they clearly think I’m going to do what I say I will do….” But two hedge fund billionaires backing a Republican candidate pales in comparison to the tens of millions of dollars flooding into Hillary Clinton’s campaign from other hedge fund billionaires – including money flowing into a joint fundraising committee called the “Hillary Victory Fund” that is sluicing money to both Hillary’s main candidate committee, Hillary for America, as well as into the Democratic National Committee and 33 separate state Democratic committees, which … Continue reading →

By Pam Martens and Russ Martens: April 4, 2016  Tomorrow the Senate Banking Committee, chaired by Senator Richard Shelby since the Republicans took control of the Senate in the 2014 midterms, will hold a hearing on “Assessing the Effects of Consumer Finance Regulations.” That title can be easily translated into “How to Achieve the Lobbyists’ Dream Wish of Killing Off the Consumer Financial Protection Bureau and Its Embarrassing Ability to Perpetually Show How Deregulation of the Financial Services Industry Has Led to Wholesale Looting of the Public.” Senator Shelby does not even make a pretense of presenting a balanced slate of witnesses at these hearings and one has to question why the Ranking Member, Senator Sherrod Brown, a Democrat, is not holding Shelby’s feet to the fire on this issue. Tomorrow’s hearing has three panelists listed: Leonard Chanin, Of Counsel at Morrison and Foerster – a law firm that was … Continue reading →

By Pam Martens and Russ Martens: April 1, 2016 According to Forbes, Ken Griffin, CEO and founder of the hedge fund, Citadel, has a net worth of $7.6 billion. But unbeknownst to most Americans, Citadel received a windfall boost from the taxpayers’ pocketbook sometime between September 18 to December 12, 2008. That was during the Wall Street crash when the U.S. government had taken over the big insurer, AIG, and decided to pay 100 cents on the dollar on AIG’s obligations to Wall Street banks and hedge funds. Did the U.S. government have to pay 100 cents on the dollar when AIG was unable to pay what it owed. Absolutely not. It could have negotiated prudently on behalf of the taxpayer. Instead, it doled out at least $93.2 billion as payment in full to banks and hedge funds, of which Citadel received at least $200 million. We say, at least, because … Continue reading →

By Pam Martens and Russ Martens: March 31, 2016  On March 7 of this year, President Obama called the full Financial Stability Oversight Council (F-SOC) to the White House for a meeting. F-SOC was created under the 2010 financial reform legislation known as Dodd-Frank to monitor systemic risks building up in the financial system and, ideally, nip them in the bud before they got out of hand. Every major Wall Street bank regulator sits on F-SOC. Immediately following his meeting with F-SOC on March 7, President Obama held a press conference (see video below) with the F-SOC members sitting around him at a large conference table. Sitting two seats away from the President was Mary Jo White, Chair of the Securities and Exchange Commission. Directly across the table was Thomas Curry, head of the Office of the Comptroller of the Currency (OCC) that oversees national banks, and Jack Lew, U.S. … Continue reading →

By Pam Martens and Russ Martens: March 30, 2016  Who could blame the researchers at the Government Accountability Office (GAO) for thinking that responding to Congressional requests for studies on how to repair the nation’s ineffective maze of financial regulation is an exercise in futility. GAO has been spending boatloads of taxpayer money for the past two decades to define the problems for Congress as our legislative branch has not only failed to take meaningful corrective measures but actually made the system exponentially worse through the repeal of the Glass-Steagall Act in 1999. During the 20 years that GAO has been warning about an ineffective financial regulatory system, taxpayers have been looted through a nonstop series of massive Wall Street frauds: the Nasdaq price fixing scandal; the rigged Wall Street research scandal leading to the $4 trillion dot.com bust; the four-decade Ponzi scheme of Bernie Madoff that was defined in … Continue reading →