By Pam Martens and Russ Martens: March 9, 2015 There are theories floating around Wall Street that Barron’s Senior Editor and award-winning investigative reporter with a law degree from Columbia, Bill Alpert, has been kidnapped by evil forces on Wall Street and replaced with a look-alike. How else to explain this wacky story under his byline on February 28. Alpert’s article was quickly discredited by Eric Hunsader of Nanex in an article titled “Robber Barrons.” (We don’t think Hunsader meant to say “Barons” either.) Themis Trading, whose owners literally wrote the book on Broken Markets, weighed in with a detailed debunking. Alpert’s article starts out with this subhead: “Small investors actually get good prices from brokers and market makers.” It then moves to debunk the Michael Lewis book Flash Boys, which is effectively debunking 60 Minutes as well, since it vetted and aired the same material. Alpert writes: “In the furor … Continue reading →

By Pam Martens: March 5, 2015 The Partnership for Civil Justice Fund (PCJF) has a slogan: “The constitution won’t defend itself.” Today, the dedicated attorneys that battle for the little guy at PCJF must be thinking – “the constitution won’t be defended by flip-flopping judges either.” PCJF finds itself in a uniquely bizarre situation. Two prominent judges with brain-trust status on the Second Circuit Court of Appeals, which is based in Manhattan, have overturned their own decision that they handed down just six months ago. That’s strange enough but what really has tongues wagging in legal circles is that they reversed themselves with no party asking them for a rehearing. The case had been accepted for an en banc (full court) hearing at the Second Circuit when the two suddenly reversed themselves. The case involves Occupy Wall Street – the largest protest movement against Wall Street bankers’ pillaging of the … Continue reading →

By Pam Martens and Russ Martens: March 4, 2015 Yesterday, the Senate Banking Committee held the first of its hearings on widespread demands to reform the Federal Reserve to make it more transparent and accountable. Senator Elizabeth Warren put her finger on the pulse of the growing public outrage over how the Federal Reserve conducts much of its operations in secret and appears to frequently succumb to the desires of Wall Street to the detriment of the public interest. Warren addressed the secret loans that the Fed made to Wall Street during the financial crisis as follows: “During the financial crisis, Congress bailed out the big banks with hundreds of billions of dollars in taxpayer money; and that’s a lot of money. But the biggest money for the biggest banks was never voted on by Congress. Instead, between 2007 and 2009, the Fed provided over $13 trillion in emergency lending … Continue reading →

By Pam Martens and Russ Martens: March 3, 2015  On December 20, 2007, Bear Stearns held a conference call with analysts to review its fourth quarter earnings. During the call, the company revealed that “For the full fiscal year, the company repurchased 12 million shares of common stock at an aggregate cost of $1.7 billion.” Less than three months later, the company collapsed. On June 13, 2008, Michael Rapoport of Dow Jones Newswires wrote that Lehman Brothers had reported “in its most recent quarterly report in April that it had repurchased about $765 million worth of its stock during its fiscal first quarter, at an average price of $59.05 a share. That includes some shares tendered by employees as payment when exercising stock options.” Three months after Rapoport wrote those words, Lehman collapsed into bankruptcy, its shares effectively worthless. Then there was Merrill Lynch, the century old iconic retail brokerage … Continue reading →

By Pam Martens and Russ Martens: March 2, 2015  Fed Chairman Janet Yellen fielded questions last Wednesday before a combative House Financial Services Committee. Tempers flared, fingers stabbed the air, arms waved wildly as House reps expressed pent up frustrations with how the Federal Reserve is handling the economy. At times, Yellen answered curtly and at one point rolled her eyes at questioning from Congressman Scott Garrett (R-NJ) who insinuated that Yellen had politicized her office by meeting so frequently with President Obama and Treasury Secretary Jack Lew. The anger and frustration were evident from both sides of the aisle. Congressman Michael Capuano, (D-MA), was incensed that the largest, most dangerous Wall Street banks are still being allowed to fail their living wills. Capuano read a portion of a statement from FDIC Vice Chair, Thomas Hoenig, which stated that these living wills “provide no credible or clear path through bankruptcy … Continue reading →

By Pam Martens and Russ Martens: February 26, 2015 The Republicans are making good on their campaign pledge to turn up the heat on the Federal Reserve. Sparks flew in the House Financial Services Committee hearing room yesterday as Fed Chair Janet Yellen appeared to present her semi-annual testimony. At times, the exchanges between Yellen and Republican members of the Committee were sharp and tense. In his opening statement to the Committee, Jeb Hensarling (R-Tx), who chairs the Committee, blamed the “anemic” recovery on Obamacare, Dodd-Frank and regulatory costs. He went on to say that “Then there’s the doubt, uncertainty and regulatory burden that grows as more and more unbridled, discretionary authority is given to unaccountable government agencies.  Although monetary policy cannot remedy this, it can help.” Republicans are locked in some kind of mind warp where the remedy for every problem is to deregulate. Despite six years of books, … Continue reading →

By Pam Martens and Russ Martens: February 25, 2015 Two major stories have broken this week showing how little has actually changed under the much heralded financial reform legislation known as Dodd-Frank. That legislation was enacted in 2010 with the promise of ending the unchecked corruption, conflicts of interest and casino capitalism that crashed the U.S. financial system in 2008, leading to the largest taxpayer bailout in the nation’s history. Yesterday, in a front page article, the New York Times used data to back up the withering conflicts of interests of SEC Chair Mary Jo White – the same conflicts that Wall Street On Parade reported two years ago. (See related articles below.) The Times reported that because Mary Jo White had worked for a major Wall Street powerhouse law firm immediately preceding her term at the SEC, representing major Wall Street firms like JPMorgan Chase, she had recused herself … Continue reading →

By Pam Martens and Russ Martens: February 24, 2015  The financial press is reporting this morning that the U.S. Justice Department is investigating at least 10 of the biggest U.S. and foreign banks for potentially rigging the gold market and other precious metals markets. That investigation comes while ongoing investigations continue into the potential rigging by big banks of the setting of interest-rate benchmarks and foreign currency. Cartel activity in every facet of U.S. and London financial markets now seems to be the norm with regulators typically five to ten years too late in sniffing out the illegal conduct. JPMorgan Chase was named by the Wall Street Journal as one of the banks under scrutiny in the precious metals probe. That could pose a particularly difficult situation for JPMorgan as it is under an effective two-year probation with the U.S. Justice Department for its role in the Bernard Madoff fraud. … Continue reading →

By Pam Martens: February 22, 2015 Let’s hope this latest rant by former New York City Mayor, Rudy Giuliani, ends once and for all that preposterous moniker of “America’s Mayor” that he claimed solely because of 9/11. While Mayor, Giuliani was sued 30 times by the New York Civil Liberties Union. It won 27 of the lawsuits. Many of the cases involved Giuliani’s assault on free speech and other First Amendment abuses under what truly makes America unique: its Bill of Rights. In case there is still someone on the planet who hasn’t yet heard the rant, on Wednesday night Giuliani told about 60 guests at a right-wing dinner at Manhattan’s 21 Club that: “I do not believe, and I know this is a horrible thing to say, but I do not believe that the President loves America. He doesn’t love you. And he doesn’t love me. He wasn’t brought … Continue reading →

By Pam Martens and Russ Martens: February 19, 2015 Before we analyze in plain English the minutes released yesterday by the Federal Open Market Committee (FOMC) of the Federal Reserve Board relating to its discussions at its last meeting on January 27-28, 2015, you need a few salient background facts. The FOMC first set its Federal Funds rate at 0 to ¼ percent (the zero bound range) on December 16, 2008. That’s more than six years ago. If the U.S. was in the recovery stage following a deep recession, we would have exited the zero bound range a long, long time ago. Clearly, we have yet to accurately define the economic twilight zone we’ve entered. Secondly, the Fed’s happy talk about the solid growth in the U.S. economy that may warrant a rate hike sometime this year just doesn’t comport with the reality of the situation. On February 10, Steve … Continue reading →