Two Admitted Felons, UBS and Citigroup, Are Now Gaming Wall Street’s Private Justice System

AdvisorLaw Got 1,004 Claims Against Brokers Erased in Just One Year

By Pam Martens and Russ Martens: October 16, 2019 ~ Yesterday, the Public Investors Advocate Bar Association (PIABA) Foundation released a research study showing that Wall Street’s banks and brokerage firms are back to their old tricks again in gaming the private justice system that its crony self-regulator, FINRA, has carved out for the benefit of Wall Street to the detriment of Main Street. PIABA previously exposed how FINRA, when it was called NASD, rigged the selection process for picking arbitrators so that the croniest ones kept getting selected. PIABA released this statement on July 20, 2000: “In direct and flagrant violation of federal law, the NASD systematically evaded the Securities and Exchange Commission approved ‘Neutral List Selection System’ arbitration rule requiring arbitrators to be selected on a rotating basis. Instead, the NASD secretly programmed its computers to select some arbitrators on a seniority basis – just what the rule was … Continue reading

Wall Street’s Mega Banks Report Earnings Today, Capping the Craziest Banking Era in U.S. History

Buybacks picked up after tax reform in 2017

By Pam Martens and Russ Martens: October 15, 2019 ~  The mega banks on Wall Street report earnings this week led off by JPMorgan Chase, Goldman Sachs, Citigroup and Wells Fargo this morning. Among the items of interest in JPMorgan Chase’s written presentation was that it spent $6.7 billion in this past third quarter buying up its own stock and thus boosting its stock price artificially beyond outside investor demand. The third quarter buybacks of its stock came on top of spending $5 billion in the second quarter and $4.7 billion in the first quarter, bringing its net repurchases of its own stock just so far this year to a whopping $16.4 billion — money that could have otherwise gone to loans to small businesses to kickstart innovation and job growth in America. This Thursday, the House Financial Services’ Subcommittee on Investor Protection, Entrepreneurship and Capital Markets will hold a … Continue reading

News Articles on the Fed’s Secret Trillions in Loans to Wall Street During the Last Crisis Have Been Purged from Bloomberg News

Mark Pittman

By Pam Martens and Russ Martens: October 14, 2019 ~  Mark Pittman was the Bloomberg News reporter responsible for the Bloomberg lawsuit against the Federal Reserve seeking the names of the banks and their share of the trillions of dollars that the Fed was secretly funneling to them during the financial crisis. Pittman had already shared in a Gerald Loeb award for Bloomberg’s five-part series, “Wall Street’s Faustian Bargain,” and many felt he was a lock for a Pulitzer. But one week before Federal Reserve Chairman Ben Bernanke was to sit for his Senate Confirmation hearing on his reappointment to another term as Fed Chairman, Pittman died of a heart attack at age 52 on November 25, 2009. At the time of Pittman’s death, the Fed was still refusing to release the details of its secret loans, despite losing its court battle at the Federal District Court. The appellate court … Continue reading

Two Investment Banks Eligible for Today’s Fed Loans Got Over $2 Trillion from the NY Fed in the Last Crisis

John Williams, President of the Federal Reserve Bank of New York

By Pam Martens and Russ Martens: October 11, 2019 ~ It’s long past the time for the U.S. Congress to ask the overarching question: is the New York Fed’s massive loan program to Wall Street firms even legal? And was it legal from 2007 to 2010 during the financial collapse on Wall Street? The Federal Reserve system was created in 1913 with a Discount Window that was to be the lender-of-last resort to deposit-taking banks to prevent panics and bank runs from bringing down the U.S. banking system. To this day, only deposit-taking institutions are allowed to borrow at the Fed’s Discount Window. The core function of deposit-taking banks throughout U.S. history has been to use those deposits to lend to worthy businesses that can help grow the U.S. economy, keep America competitive, and bring good paying jobs to the American people. Never in its history has the Federal Reserve, … Continue reading

In the Midst of a Liquidity Crisis, the Fed Rolls Back Liquidity Requirements at Banks

Lael Brainard, Member of the Federal Reserve Board of Governors

By Pam Martens and Russ Martens: October 11, 2019 ~ There was an outcry in Washington yesterday over the latest move by the Federal Reserve. While the New York Fed is pumping hundreds of billions of dollars each week into Wall Street because of a liquidity crisis, the Washington, D.C. based central bank, the Federal Reserve Board of Governors, just changed its rules to lessen liquidity buffers at banks and rolled back other critical safeguards. The response from Gregg Gelzinis, policy analyst for Economic Policy at the Center for American Progress was swift. He released the following statement: “Today, the Federal Reserve eroded several critical banking protections put in place following the 2007-2008 financial crisis, further putting the economy at risk. The final rule threatens the safety and soundness of the banking system from multiple angles. Reducing the stringency of bank capital requirements, liquidity rules, and stress testing makes large … Continue reading

Where Are the Hundreds of Billions in Loans from the Fed Actually Going on Wall Street?

By Pam Martens and Russ Martens: October 10, 2019 ~ No one can say with any certainty where the hundreds of billions of dollars that the Federal Reserve has been pumping into Wall Street since September 17 are actually ending up. The Fed is not releasing the names of which of its primary dealers (securities firms) are taking the lion’s share of the loans nor does anyone know if those borrowers are making further loans with the money (which is a core purpose of a central bank’s lender of last resort function) or simply plugging a whole in their own leaky boat. Astonishingly, Congress has yet to call a hearing to ask these critical questions. Let’s say, hypothetically, that there is a bank with a large, interconnected footprint on Wall Street that’s in trouble and on top of that there’s a big hedge fund taking on water and listing on … Continue reading

Breaking News: Zuckerberg to Testify at House Hearing on Facebook’s Plan for Cryptocurrency

October 9, 2019 ~ Congresswoman Maxine Waters,  Chairwoman of the House Financial Services Committee, announced that Facebook Chairman and CEO Mark Zuckerberg will testify before the Committee at an October 23 hearing. Zuckerberg will be the sole witness at the hearing, which is entitled, “An Examination of Facebook and Its Impact on the Financial Services and Housing Sectors.” In July, Chairwoman Waters and other Committee Democrats sent a letter to Facebook requesting an immediate moratorium on the implementation of Facebook’s proposed cryptocurrency, Libra, and digital wallet, Calibra. Also in July, Waters convened a hearing entitled, “Examining Facebook’s Proposed Cryptocurrency and Its Impact on Consumers, Investors, and the American Financial System,” with testimony from Calibra CEO David Marcus. At the hearing Committee Members discussed a draft bill, the “Keep Big Tech Out of Finance Act.” The draft legislation prohibits large platform utilities, like Facebook, from becoming chartered, licensed or registered as a U.S. financial institution (e.g. like taxpayer-backed banks, … Continue reading

Fed’s Powell Admits a Bigger Bailout for Wall Street Is Coming; Fed’s Balance Sheet Ballooned by $176 Billion Since September

Federal Reserve Chairman Jerome Powell Speaking at the National Association of Business Economists on October 8, 2019

By Pam Martens and Russ Martens: October 9, 2019 ~ Yesterday, at a speaking event in Denver at the National Association of Business Economists, Federal Reserve Chairman Jerome Powell acknowledged that a larger, long-term bailout of Wall Street is coming. His two key points were buried in a subterfuge of puffery but came across loud and clear: “…my colleagues and I will soon announce measures to add to the supply of reserves over time.” And this: “As we indicated in our March statement on balance sheet normalization, at some point, we will begin increasing our securities holdings to maintain an appropriate level of reserves. That time is now upon us.” Let that final statement sink in for a moment. Under the previous Federal Reserve Chair, Janet Yellen, balance sheet normalization at the Federal Reserve meant reducing the Fed’s unprecedented $4.5 trillion balance sheet to get back to something near pre-crisis levels. … Continue reading

Connecting the Dots to the Budding Wall Street Crisis

By Pam Martens and Russ Martens: October 8, 2019 ~ We’re going to do today what mainstream media has failed to do for the American people so far this year — as well as prior to the onset of the 2008 financial collapse on Wall Street. We’re going to connect the dots that strongly suggest that both the U.S. and global financial system have a real problem occurring right under the fogged lenses of Congress. Dot 1 — Freezing Customers Out of their Mutual Fund. Let’s start with our reporting on July 11 of this year, titled Is There a Stealth Financial Crisis? Alarm Bells Are Ringing. In that article we pointed out that one of Britain’s high profile money managers, Neil Woodford, had frozen customer withdrawals from his flagship $4.7 billion Woodford Equity Income Fund. The latest news is that the fund is not expected to reopen until at … Continue reading

Fed Says It Will Offer $310 Billion More in Term Loans to Wall Street as Over 68,000 Job Cuts Planned at Mega Banks

New York Fed Headquarters Building in Lower Manhattan

By Pam Martens and Russ Martens: October 7, 2019 ~ One or more U.S. or foreign banks that are primary dealers to the Federal Reserve Bank of New York is in need of longer-term loans that they are unable to get anywhere else – at least at an affordable rate of interest. That’s the only reasonable conclusion that can be drawn from the Fed’s announcement on Friday that it is extending its money pumping program to Wall Street until at least November 4 and will be offering an additional $310 billion cumulatively in term loans (most for 14-days at a time) as well as offering at least $75 billion daily in overnight loans. The Fed’s money sluicing operation that began abruptly on September 17 is taking on the distinct appearance of its machinations during the early days of the 2008 crash – a time when it also refused to name … Continue reading

There’s Nothing Normal About the Fed Pumping Hundreds of Billions Weekly to Unnamed Banks on Wall Street: “Somebody’s Got a Problem”

John Williams, President of the Federal Reserve Bank of New York

By Pam Martens and Russ Martens: October 4, 2019 ~ Yesterday, the House Financial Services Committee released its hearing schedule for October. There is not a peep about holding a hearing on the unprecedented hundreds of billions of dollars that the Federal Reserve Bank of New York is pumping into unnamed banks on Wall Street at a time when there is no public acknowledgement of any kind of financial crisis taking place. Congressional committees should have been instantly on top of the Fed’s actions when they first started on September 17 because the Fed had gone completely rogue from 2007 to 2010 in funneling an unfathomable $29 trillion in revolving loans to Wall Street and global banks without authority or even awareness from Congress. The Fed also fought a multi-year court battle with the media in an effort to keep its giant money funnel a secret. According to Section 1101 … Continue reading

Derivative Risks Rising: Sell-Off in Interconnected Mega Banks and Insurers

By Pam Martens and Russ Martens: October 3, 2019 ~  The Dow Jones Industrial Average has lost 838 points in the past two days of trading. On a percentage basis, its losses pale in comparison to the losses experienced over the past two days by some of the biggest global banks as well as insurance companies that are derivative counterparties to the big banks. Mega banks continue to be allowed to tie their risky trading gambles to the balance sheets of insurers that also hold life insurance policies and retirement annuities for Moms and Pops across the U.S. by using the insurers as counterparties for their derivative trades. That this is still happening illustrates just how little has changed in the way of enlightened regulation of Wall Street since the banks brought down the big insurer, AIG, in 2008. The U.S. government was forced to seize AIG and institute a … Continue reading

JPMorgan Chase Has a Pattern of Criminality; Now Wall Street Is Pointing to the Bank as a Cause of the Fed’s Emergency Loans

By Pam Martens and Russ Martens: October 2, 2019 ~ Two notable things happened on Monday, September 16, 2019. Rates started to spike in the overnight loan (repo) market, reaching a high of 10 percent the next day and forcing the Federal Reserve to step in as a lender of last resort for the first time since the financial crisis. The Fed has had to intervene every business day since then with overnight loans, funneling hundreds of billions of dollars to its primary dealers, while also providing $150 billion in 14-day term loans to unnamed banks. The other notable thing to occur on September 16 was this: The largest bank in the United States, JPMorgan Chase, had its precious metals desk charged by the U.S. Department of Justice with being a criminal enterprise for approximately eight years as it rigged the prices of gold, silver and other precious metals. The … Continue reading

Tom Mueller’s New Book Shows How Whistleblowers Are Increasingly Left to Do the Job that Law Enforcement Won’t

Tom Mueller, Author of Crisis of Conscience -- Whistleblowing in an Age of Fraud

By Pam Martens and Russ Martens: October 1, 2019 ~ Tom Mueller’s new book, Crisis of Conscience: Whistleblowing in an Age of Fraud is being released today by Riverhead Books, an imprint of Penguin Random House. It’s packed with seven years of research and inspiring personal interviews. Despite its initially intimidating 600-page heft, it’s an enticing read as it connects the dots to how a country like the United States, founded on the premise of “equal justice under law,” as engraved on the front of the U.S. Supreme Court, has become a “banana republic” with only whistleblowers’ pockets stuffed with crinkled documents or secret tape recordings all that stand between resuscitating our democracy or a complete collapse into oligarchy. Mueller builds an incontrovertible case that the United States has become a dystopian society where almost every government entity that a citizen would typically turn to for redress over a lawless … Continue reading

The Repo Loan Crisis, Dead Bankers, and Deutsche Bank: Timeline of Events

Deutsche Bank Thumbnail

By Pam Martens and Russ Martens: September 30, 2019 ~ Last week, as the Fed was carrying out hundreds of billions of dollars in emergency loan operations on Wall Street for the second week in a row – the first such operations since the financial crisis – Deutsche Bank’s headquarters office in Frankfurt, Germany was being raided by police for the second time in less than a year. That’s not the sort of thing that inspires confidence among depositors to keep their money in your bank. Deutsche Bank has been a constant headache for the U.S. financial system because it is heavily intertwined via derivatives with the big banks on Wall Street, including JPMorgan Chase, Citigroup, Goldman Sachs, Morgan Stanley and Bank of America. It has become the dark cloud on the horizon in the same way Citigroup cast a negative pall in the early days of the financial crisis … Continue reading

The Fed Is Offering $100 Billion a Day in Emergency Loans to Unnamed Banks and Congress Is Not Curious Enough to Hold a Hearing

New York Fed Headquarters Building in Lower Manhattan

By Pam Martens and Russ Martens: September 27, 2019 ~ The Federal Reserve Bank of New York first initiated its emergency overnight loans to Wall Street this year on Tuesday, September 17, starting off at the rate of $75 billion daily. It then increased its loans by adding, in addition to the $75 billion daily, 14-day term loans in the amount of $30 billion to be offered three times this past week. But after the demand for the first 14-day loan was more than double the $30 billion offered, the New York Fed boosted the next term loans to $60 billion and increased its overnight loans to $100 billion. What will next week bring? When Wall Street can get super cheap loans from the Fed in the tens of billions of dollars with no questions asked by Congress, it will continue upping its demands until the Fed is once again … Continue reading

High Drama in SEC House Hearing Ignored by Mainstream Media

By Pam Martens and Russ Martens: September 26, 2019 ~ Editor’s Note: We have a news flash for our reporting colleagues at mainstream media – you are missing high drama and great quotes by failing to cover the Wall Street-related hearings being held regularly by the House Financial Services Committee. This Committee is dead serious about holding Federal regulators and Wall Street banks’ collective feet to the fire. After more than 30 years of watching congressional hearings covering Wall Street, we have to commend the Chair of this Committee, Maxine Waters, and the individual Congressmen and Congresswomen who serve on this Committee for their outstanding knowledge of how Wall Street has erected an elaborate and highly efficient wealth transfer system from the poor and middle class of America to the pockets of the one percent. ~~~ On Tuesday, September 24, 2019, the U.S. House of Representatives’ Financial Services Committee, chaired … Continue reading

Wall Street Bank Stocks Closed in a Sea of Red Yesterday as Fed Pumps in Another $105 Billion of Liquidity

By Pam Martens and Russ Martens: September 25, 2019 ~ It was only a matter of time until the public perception of the Federal Reserve having to funnel billions of dollars a day to Wall Street banks as an emergency source of liquidity started to impact the share prices of those same banks. It all caught up with the mega banks yesterday as every single one of their stocks closed in the red. Notably, the German bank, Deutsche Bank, that is heavily interconnected to the behemoths of Wall Street through derivatives, lost the most ground yesterday, closing down 2.70 percent at $7.58 – just $1.14 above its all-time low of $6.44 that it set on August 15. The U.S. banks that were named as being heavily interconnected to Deutsche Bank via derivatives in a 2016 report from the International Monetary Fund (IMF) closed as follows yesterday: Goldman Sachs lost 2.67 percent; … Continue reading

What Has Frightened Wall Street Banks from Lending in the Repo Market?

By Pam Martens and Russ Martens: September 24, 2019 ~ Last Friday the Federal Reserve Bank of New York made it clear that its interventions in the overnight repo lending market were going to be a longer-term action. Call it what you will, the Fed has effectively returned to quantitative easing (QE) where it buys up Treasuries, Federal agency debt and agency mortgage-backed securities (MBS) from financial institutions in exchange for loans. According to the New York Fed, the program has now been extended to at least October 10 and likely thereafter in one form or another. The Fed will be pumping in $75 billion daily in overnight repo loans while infusing $30 billion in 14-day term loans three times this week for a total of $90 billion in term loans. The fact that there is one or more financial firms needing $30 billion on a two-week basis and can’t … Continue reading

JPMorgan Chase Has Billions in CRE Loans Riding on WeWork Surviving

Adam Neumann

By Pam Martens and Russ Martens: September 23, 2019 ~  WeWork’s business model isn’t workable. Everybody understands that except the Wall Street bank that has the most to lose if WeWork’s initial public offering (IPO) of its stock doesn’t move forward. That bank is JPMorgan Chase, one of the two main underwriters of the IPO, along with Goldman Sachs. WeWork’s business model is to take long-term leases in commercial office buildings and then sub-lease that space under short leases to small businesses, start-ups and freelancers – none of which are particularly known for their ability to pay rent in a downturn. WeWork is currently on the hook for more than $47 billion in long term leases while it has yet to figure out how to make a dime of profits. JPMorgan Chase is so interconnected with WeWork that to a number of minds WeWork looks like little more than a … Continue reading

The Fed’s “Emergency” Actions this Week Were Dated 48 Days Earlier

New York Fed Headquarters Building in Lower Manhattan

By Pam Martens and Russ Martens: September 20, 2019 ~ The storyline in the business press is that the lending rate on overnight repos had spiked to an unprecedented 10 percent, necessitating an emergency infusion of $53 billion by the New York Fed on Tuesday to ramp up liquidity for overnight loans and bring down the loan rate. (That was followed with $75 billion more on Wednesday, Thursday and today – raising the question that if the money is going to the same banks, isn’t that a term loan, not an overnight loan? We don’t know, however, if the money is going to the same banks because the Fed, as it did during the 2008 financial crisis, is staying mum about where the money is going.) As it turns out, the Federal Reserve’s Federal Open Market Committee (FOMC) directive that authorized the Tuesday operation was dated July 31, 2019 – … Continue reading

At Press Conference, Fed Chair Powell Refuses to Answer Whether Wall Street Banks Are Too Big to Manage

Fed Press Conference, September 18, 2019

By Pam Martens and Russ Martens: September 19, 2019 ~ Following a lack of liquidity on Wall Street, which necessitated the Federal Reserve having to provide $53 billion on Tuesday and another $75 billion on Wednesday to normalize overnight lending in the repo market, the Chairman of the Fed, Jerome (Jay) Powell held his press conference at 2:30 p.m. yesterday. The press gathering followed both a one-quarter point cut in the Fed Funds rate by the Fed yesterday as well as the first intervention by the Fed in the overnight lending market since the financial crash. (The Fed had to intervene again this morning, making another $75 billion in repo loans available.) The week’s unsettling events should have provided the basis for reporters to fire questions at the Fed Chair along the following lines: (1) Did the overnight repo lending rate jump to an historical high of 10 percent on … Continue reading

The Fed Intervened in Overnight Lending for First Time Since the Crash. Why It Matters to You.

Jerome Powell, Chairman of the Federal Reserve

By Pam Martens and Russ Martens: September 18, 2019 ~ Yesterday felt a little like that scene from the 1946 movie “It’s a Wonderful Life” starring Jimmy Stewart. There’s a run on Stewart’s bank because his absent-minded Uncle Billy loses the cash he was sent off to deposit on behalf of the bank. The bank examiners discover there’s money missing and rumors spread. The rumors that spread yesterday were not that money was missing at a Wall Street bank but that liquidity was missing. It had dried up to the point that the major Wall Street banks could not, or would not, handle the demand for loans called overnight repurchase agreements (repos) that were coming their way. (Repos are a short-term form of borrowing where corporations, banks, brokerage firms and hedge funds secure loans by providing safe forms of collateral such as Treasury notes.) The oversized demand for the repos … Continue reading

Will Jamie Dimon Finally Lose His Job Over Racketeering Charges?

By Pam Martens and Russ Martens: September 17, 2019 ~ Yesterday, three traders at JPMorgan Chase, the bank headed by Jamie Dimon, got smacked with the same kind of criminal felony charge that was used to indict members of the Gambino crime family in 2017. The charge is racketeering and falls under the Racketeer Influenced and Corrupt Organizations Act or RICO. According to the Justice Department, the traders engaged in a pattern of rigging the gold, silver and other precious metals markets from approximately May 2008 to August 2016. One of the traders, Michael Nowak, was actually a Managing Director at the bank and the head of its Global Precious Metals Desk. The other two traders are Gregg Smith and Christopher Jordan. RICO is typically used to indict mobsters – which makes its use against employees of the largest bank in America a very disquieting event. But even more disquieting … Continue reading

In the WeWork IPO, the Money Trails End Up at JPMorgan’s Doorstep

Lord & Taylor Building at 424 Fifth Ave. Was Financed With a $600 Million Loan from JPMorgan and $50 Million from WeWork

By Pam Martens and Russ Martens: September 16, 2019 ~ According to the amended prospectus filed with the Securities and Exchange Commission to alert the public to the thousands of warts with malignant possibilities sprouting out of the office rental company, WeWork, which plans to offer its shares to the public for the first time, JPMorgan Chase will receive something no other underwriter is getting in this deal: a cool $50 million extra as a “structuring fee.” On top of that, of course, the bank will also get the fat underwriting fees that the other banks involved in the IPO get. That’s just one of the many curious ways that JPMorgan Chase stands out in its relationship with WeWork. (The parent of WeWork, The We Company, is actually offering the shares to the public.) As it turns out, quite a few of JPMorgan Chase’s commercial real estate clients who have … Continue reading