There Is Not One Elected Official at the Federal Reserve, But It Has Been Unilaterally Rewriting the Rules on Wall Street Since 2007

Federal Reserve Building, Washington, D.C.

By Pam Martens and Russ Martens: June 9, 2021 ~ The Federal Reserve will release the results of its stress tests of the mega banks on Wall Street on June 24. That exercise is nothing more than a shell game to mislead Congress and the public into believing that actual due diligence is being done by the Fed on these massive federally insured banks with their inhouse trading casinos. (See Three Federal Studies Show Fed’s Stress Tests of Big Banks Are Just a Placebo.) In reality, the Fed is a completely captured appendage of Wall Street. The Fed has outsourced the nitty-gritty supervision of Wall Street banks to the New York Fed, which is, literally, owned by the same banks. (See These Are the Banks that Own the New York Fed and Its Money Button.) That the Fed is still allowed by Congress to have anything to do with supervising these … Continue reading

From London to Los Angeles, News Outlets Go Dark Around the World this Morning; Fastly Takes Blame

Candle in Darkness

By Pam Martens and Russ Martens: June 8, 2021 ~ If you’re an early riser and like a cup of coffee with online news before officially starting your day, you got your coffee sans the news at numerous websites this morning. From approximately 5:30 a.m. to 6:30 a.m. ET this morning, major news sites like the New York Times, CNN, Financial Times and Guardian U.K. were dark or had error messages. The sites were not just dark in the U.S. but around the world. According to Fastly, which took the blame for the outages, the disruption impacted major cities across the U.S. and around the world, including Los Angeles, New York, Boston, Chicago, London, Paris, Dubai, Hong Kong, Singapore, Tokyo, Stockholm, Munich, Amsterdam, Santiago, Rio de Janeiro and dozens more. According to the Guardian news outlet in the U.K., Fastly is “a cloud computing services provider” that is supposed to “speed … Continue reading

The Wall Street Captured Fed Consolidates Its Power Under Biden

David Dayen

By Pam Martens and Russ Martens: June 7, 2021 ~ Janet Yellen, the current U.S. Treasury Secretary, is also the Chair of the Financial Stability Oversight Council, which includes every Wall Street regulator. Before coming to the Treasury Department, Yellen was the Chair of the Federal Reserve and had spent the bulk of her working career at the Fed or the San Francisco Fed. When Yellen was not reappointed as Fed Chair by Donald Trump when her Chairmanship term expired in 2018, she immediately cashed in her chips on Wall Street, collecting millions of dollars in speaking fees in 2019, and undisclosed millions more in 2018. (See Janet Yellen’s Cash Haul of $7 Million Is Just the Tip of the Iceberg; She Failed to Report Her Wall Street Speaking Fees from JPMorgan and Others in 2018.) Yellen was a Federal Reserve Board Governor when she was appointed Fed Chair. Her term … Continue reading

Crypto Will Be Put Under the Microscope at June 30 House Hearing

By Pam Martens and Russ Martens: June 4, 2021 ~ The House Financial Services Subcommittee on Oversight and Investigations, chaired by Congressman Al Green of Texas, will hold a hearing on June 30 titled:  “America on ‘FIRE.’ Will the Crypto Frenzy Lead to Financial Independence and Early Retirement or Financial Ruin?” The announcement of the hearing came yesterday, the same day that Wall Street On Parade reported that the Federal Trade Commission was witnessing a skyrocketing increase in crypto scams. The FTC wrote on May 17: “Reports to the FTC’s Consumer Sentinel suggest scammers are cashing in on the buzz around cryptocurrency and luring people into bogus investment opportunities in record numbers. Since October 2020, reports have skyrocketed, with nearly 7,000 people reporting losses of more than $80 million on these scams.” The Subcommittee has not yet posted its lineup of witnesses for the hearing. Republicans, who are the minority party … Continue reading

Crypto: Congress Dawdles as $1.7 Trillion Con-Game Goes Unregulated, Threatening Reputation of U.S. Markets

Bitcoin

By Pam Martens and Russ Martens: June 3, 2021 ~ If you want to get your hair cut outside of your home in the United States, the job has to be done by a licensed worker at a regulated business. The same thing applies to plumbers, electricians, home inspectors, real estate and insurance agents. They all require a license and are subject to regulatory scrutiny. Likewise, commodities like corn, sugar, wheat, lumber and oil are all traded on regulated exchanges which are overseen by a federal regulator. But, for reasons that have yet to be explained to the American people, when it comes to the $1.7 trillion cryptocurrency market – which is effectively a con-game based on the greater fool theory, nothing is regulated. Not the crypto currency; not the promoters; not the crypto exchanges; and not the firms that are providing as much as 100 times leverage to fuel this … Continue reading

Fed’s Reverse Repos Surge to Historic $485 Billion: What’s Wall Street Afraid of This Time?

Federal Reserve Building, Washington, D.C.

By Pam Martens and Russ Martens: June 2, 2021 ~ The chart above has been compiled by the St. Louis Fed using the New York Fed’s data for its issuance of Reverse Repurchase Agreements, otherwise known as Reverse Repos. What’s a Fed Reverse Repo? According to the New York Fed, it is when counterparties loan the Fed money in exchange for collateral, which is typically Treasury bills. In the most recent action, we’re talking about the New York Fed, acting on behalf of the Federal Reserve, selling U.S. Treasuries to Wall Street banks, trading houses, mutual funds and government-sponsored enterprises in overnight and weekend deals and paying zero or next to zero as an interest rate when it buys back the securities. Why would the smartest guys on Wall Street, who never let a loose dime slip through their fingers in order to get a larger cut of the annual bonus pool, be … Continue reading

The Best Hedge Fund Performance in History; Now Clients Can’t Get Access to their Money

Piggy Bank Thumbnail

By Pam Martens: June 1, 2021 ~  “…no adequate rational market explanation for this performance.” If something sounds too good to be true, you can bet your discolored Bernie Madoff account statements that it will inevitably end badly. Quietly, at the start of a three-day weekend, Bloomberg News published this titillating news item about the hedge fund Renaissance Technologies, known as RenTech or RenTec on Wall Street: “Credit Suisse Group is temporarily barring clients from withdrawing all their cash from a fund that invests with Renaissance Technologies…The fund lost about 32% last year, in line with the decline in the Renaissance Institutional Diversified Alpha Fund International fund that it invests into, the people said. Renaissance, regarded as one of the most successful quant investing firms in the world, was rocked by billions of dollars in redemptions earlier this year after unprecedented losses in 2020.” Put the above paragraph together with the … Continue reading

House Hearing: Only Jamie Dimon’s Microphone Mysteriously Malfunctions During Pivotal Questioning

Jamie Dimon Being Sworn In at House Financial Services Committee Hearing, May 27, 2021

By Pam Martens and Russ Martens: May 28, 2021 ~ CEOs from the six largest banks on Wall Street testified under oath yesterday before the House Financial Services Committee. But only one CEO, Jamie Dimon, had an ear-piercing electronic sound emanate from his microphone, which blocked out the sound of his voice, when he was asked key questions by two separate members of Congress. The situation was so bizarre that Congressman Juan Vargas, a Democrat from California, said this about the episodes: “It reminded me of the movie ‘Young Frankenstein.’ Every time they said ‘Luther’ the horses would get scared. Every time they said ‘Jamie Dimon,’ the computers would get scared.” The first episode occurred after Congressman Al Green, a Democrat from Texas, told Dimon that two of the banks previously purchased by JPMorgan Chase had used slaves as loan collateral and at one point, after calling in a loan, the … Continue reading

Justice Department Opens Probe into Potential Bank Cartel that Financed Archegos

By Pam Martens and Russ Martens: May 27, 2021 ~ Last evening, Bloomberg News, followed by the Wall Street Journal, reported that the U.S. Department of Justice has opened a probe into the late March collapse of the Archegos family office hedge fund. The Wall Street Journal reported that “Banks that lent to Archegos, including Credit Suisse Group AG, UBS Group AG, Goldman Sachs Group Inc. and Morgan Stanley,” had been contacted for information by the Justice Department. According to media reports, Archegos is believed to have leveraged $20 billion of its own capital into more than $100 billion in stock and derivative exposure through margin loans from the banks named above, as well as others. Among the laundry list of items the Justice Department may be investigating, is whether the banks violated the Federal Reserve’s Regulation T, which would have limited the banks to an initial margin loan of no … Continue reading

Senator Sherrod Brown Sends a Message to Wall Street Banks: You No Longer Own the Senate Banking Committee

Senator Sherrod Brown (Thumbnail)

By Pam Martens and Russ Martens: May 27, 2021 ~ Senator Sherrod Brown opened yesterday’s Senate Banking Committee hearing with some fiery words about the mega banks on Wall Street, stating: “Like most Americans, I want businesses to make money, and I don’t mind that bankers are rich. Some people are going to be wealthy, and that’s fine. Here’s the problem: under the current system, Wall Street profits no matter what happens to workers, because those profits now come at the expense of workers. And your banks are the ones that largely built that system. “We often hear about the ‘invisible hand.’ But the economy isn’t physics – it’s not governed by scientific laws outside our control. It’s made up of people making choices about our values and the society we want to live in. The ‘invisible hand’ doesn’t lay off workers. The ‘invisible hand’ didn’t invent credit default swaps. The … Continue reading