Campus Protests Over Gaza Open a Pandora’s Box for Wall Street Megabanks that Underwrote $8 Billion of Israel’s Bonds in March

Goldman Sachs Protester (Thumbnail)

By Pam Martens and Russ Martens: May 6, 2024 ~ The pro-Palestinian protestors on college and university campuses across the U.S. have opened a pandora’s box for the Wall Street megabanks that underwrite billions of dollars in Israel bonds – including $8 billion in March of this year – at a time when Israeli Prime Minister Benjamin Netanyahu’s conduct of the war in Gaza has come under broad condemnation. U.S. Senator Bernie Sanders of Vermont, who is Jewish, described Netanyahu’s war operation as follows on the April 28 edition of CNN’s State of the Union: “Right now, what Netanyahu’s right-wing, extremist and racist government is doing is unprecedented in the modern history of warfare. They have killed in the last six-and-a-half months 33,000 Palestinians, wounded 77,000, two-thirds of whom are women and children. “They have destroyed over 60 percent of the housing. They have destroyed the health care system. They have … Continue reading

Wall Street’s Megabanks Have Trillions of Dollars Off-Balance Sheet, in a Replay of Accounting Hubris that Led to the 2008 Wall Street Collapse

By Pam Martens and Russ Martens: May 2, 2024 ~ When the Financial Crisis Inquiry Commission released their final forensic report on the causes of the 2008 financial collapse on Wall Street – the worst collapse since the 1929-1932 collapse – it pointed to hidden leverage in off-balance sheet entities at the megabanks on Wall Street as a key driver of the crisis. It wrote: “From 2000 to 2007, large banks and thrifts generally had $16 to $22 in assets for each dollar of capital, for leverage ratios between 16:1 and 22:1. For some banks, leverage remained roughly constant. JP Morgan’s reported leverage was between 20:1 and 22:1. Wells Fargo’s generally ranged between 16:1 and 17:1. Other banks upped their leverage. Bank of America’s rose from 18:1 in 2000 to 27:1 in 2007. Citigroup’s increased from 18:1 to 22:1, then shot up to 32:1 by the end of 2007, when Citi … Continue reading

JPMorgan Remains the Second Largest Money Market Fund Manager, Despite Needing Billions in Money Market Bailouts from the Fed in 2020

By Pam Martens and Russ Martens: April 30, 2024 ~ The Office of Financial Research (OFR), the federal agency created after the financial crash of 2008 to keep federal banking regulators on top of threats to financial stability, has posted an interactive chart showing the largest managers of Money Market Mutual Funds in the U.S. Alarmingly, the parent of the largest and riskiest bank in the United States – JPMorgan Chase – is also the second largest Money Market Mutual Fund manager. According to the OFR, as of March 31, 2024, JPMorgan was managing $657.9 billion in money market funds, second only to Fidelity, which on the same date was managing $1.3 trillion in money market funds. The data comes from Securities and Exchange Commission Form N-MFP2. JPMorgan’s federal regulators have failed to stem the bank’s growth despite the fact that JPMorgan Chase has been tapping massive bailouts from the Federal … Continue reading

The First Bank Failure of 2024 Leaves a 1-Cent Stock for Investors and $667 Million in Losses for the FDIC

By Pam Martens and Russ Martens: April 29, 2024 ~ Quietly on Friday, the FDIC announced the first federally-insured bank failure of 2024, the publicly-traded Republic First Bancorp (ticker FRBK) which did business as Republic Bank. In an unsettling sign of the times, this federally-insured bank was trading at 1-cent on Friday; down from 27-1/2 cents last September when we first reported on its dire condition. Do Americans really want to see a bank that’s holding their life savings to be trading as a penny stock? Yes, it’s true that no depositor has lost a penny in a federally-insured bank since the creation of federal deposit insurance in 1933 if they remained under the federal insurance cap on deposits. Currently, that insurance cap is $250,000 per depositor, per bank. But still, public confidence in the safety and soundness of the U.S. banking system would suggest that the phrases penny stock and … Continue reading

Catch and Kill Protection Rackets: Trump, Weinstein, Epstein and Wall Street

Trump, Pied Piper

By Pam Martens and Russ Martens: April 26, 2024 ~ Editor’s Note: This article has been edited and updated from an earlier version, published in 2020. Trump and Catch and Kill: Yesterday, David Pecker, the former Chairman and CEO of American Media Inc. (AMI), the parent company of the National Enquirer tabloid, testified for a third day in the 34-count criminal trial of former President Donald Trump in New York. Pecker continued to expand on the sordid details of a catch and kill operation he had agreed to operate with the active involvement of Trump and his then attorney, Michael Cohen. The operation involved buying up stories about Trump’s salacious affairs with women and then killing them from publication in order to help Trump’s campaign for the presidency in 2016. There was also an understanding that Pecker would run negative articles about Trump’s political opponents in the National Enquirer. During opening … Continue reading

Wall Street’s Judge Shopping Continues: It’s Trying to Stop the FTC’s Ban on Worker Handcuffs Known as Non-Compete Agreements 

By Pam Martens and Russ Martens: April 25, 2024 ~ Sullivan & Cromwell, the go-to law firm for Wall Street in the past, has become a case study in how not to manage one’s corporate reputation. (See Wall Street’s Go-To Law Firm, Sullivan & Cromwell, Got in Bed with Crypto; Now Its Reputation Is Being Hammered.) Apparently, having previously represented FTX fraudster, Sam Bankman-Fried, and then grabbing FTX’s bankruptcy proceeding and billing $180 million, is not enough shame for Sullivan & Cromwell to heap on its reputation. It is now listed as the Big Law firm that filed a federal lawsuit yesterday on behalf of the corporate front groups, the U.S. Chamber of Commerce, the Business Roundtable, and others, to stop the Federal Trade Commission’s (FTC’s) new rule banning non-compete agreements for most workers. (An 8-attorney law firm in Texas, Potter Minton, is also listed on the filing for the plaintiffs.) Sullivan … Continue reading

The Fed Tallies Up a Big Threat to Financial Stability in the U.S.: “Runnables” at $21.3 Trillion

Federal Reserve Building in Washington, D.C.

By Pam Martens and Russ Martens: April 23, 2024 ~ Last Friday, the Federal Reserve released its semi-annual Financial Stability Report. In the prior five years, the spring edition of the Fed’s Financial Stability Report was released in May. This year, for reasons we can only guess at (nervously), the Fed released the spring edition early, in April. Given that last spring the second, third and fourth largest bank failures in U.S. history occurred, handing over $30 billion in losses to the federal Deposit Insurance Fund, and one of those banks (Silicon Valley Bank) experienced the fastest run on its deposits in U.S. history, one particular item in the new report that caught our attention was this: “Overall, estimated runnable money-like financial liabilities grew 8.8 percent to $21.3 trillion (75 percent of nominal GDP) over the past year, as a decline in uninsured deposits was more than offset by an increase in assets under management … Continue reading

Billionaire-Owned Media Has Gone Full Throttle to Save Fellow Billionaire, Jamie Dimon

By Pam Martens and Russ Martens: April 22, 2024 ~ The Washington Post Editorial Board appears to have sipped the same kool aid as Bloomberg News. As we’ve frequently reported in the past, Bloomberg News has spent the better part of the last decade attempting to brainwash the public into believing that the head of JPMorgan Chase, Jamie Dimon, is a respected statesman of Wall Street. (See here, here, and here.) In reality, JPMorgan Chase has admitted to an unprecedented five criminal felony counts with Dimon at the helm and paid fines in the tens of billions of dollars for an additional crime wave that rivals an organized crime family. Billionaire Michael Bloomberg, the former Mayor of New York, is the majority owner of Bloomberg LP, the owner of Bloomberg News. In 2016, Michael Bloomberg even co-authored an opinion piece with Dimon. The same year, the New York Post reported that JPMorgan Chase was … Continue reading

The Professor Who Wrote the Seminal Book on Wall Street Megabanks Calls Today’s Financial System “Dangerously Unstable”

Taming the Megabanks

By Pam Martens and Russ Martens: April 18, 2024 ~ George Washington University Law Professor, Arthur Wilmarth, has done it again. After authoring the seminal book on the insidious evolution and enormous dangers still posed by the Wall Street megabanks (Taming the Megabanks: Why We Need a New Glass-Steagall Act) Wilmarth is now out with a new, gripping paper. In the paper’s abstract, Wilmarth explains how the risks posed by the Wall Street megabanks in 2008 have become exponentially more dangerous today. He writes: “The dangers created by universal banks (including their ‘internal’ shadow banking affiliates) and ‘external’ shadow banks have intensified since 2009. A toxic symbiosis has developed between the syndication and underwriting of risky loans and debt securities by universal banks and the origination of speculative private credit by ‘external’ shadow banks. That noxious partnership has helped to generate unprecedented levels of risky consumer and corporate debts. “Universal banks and … Continue reading

Gold Has Set Historic Highs this Year as the Federal Reserve Has Reported Historic Losses

By Pam Martens and Russ Martens: April 17, 2024 ~ According to Federal Reserve data, for the first time in its history, the Fed has been losing money on a consistent basis since September 28, 2022. As of the last reporting date of April 10, those losses came to a cumulative $162.9 billion. As the chart above from the Fed indicates, the monthly losses thus far in 2024 have ranged from a high of $13.4 billion in January to $5.5 billion in March. We are not talking about unrealized losses on the debt securities the Fed holds on its balance sheet, which it acquired under its various Quantitative Easing programs. (The Fed does not mark to market the gains or losses on those securities on the basis that it plans to hold them to maturity.) We’re talking about real cash operating losses the Fed is experiencing from earning approximately 2 percent interest on … Continue reading