By Pam Martens and Russ Martens: February 18, 2015 Hillary Clinton, who has yet to be named the Democratic candidate for President in 2016, finds herself enmeshed in a transatlantic scandal that is an untimely reminder of the scandal fatigue that Americans were forced to endure during the Presidency of her husband, Bill Clinton. Last Monday, the Guardian newspaper, the BBC, the French newspaper, Le Monde and dozens of other news outlets disclosed that the Swiss banking unit of the global behemoth bank, HSBC, had assisted the ultra rich in hiding assets and providing advice on how to evade domestic tax authorities. The documentation for the revelations was provided by a former HSBC employee, Hervé Falciani, to the International Consortium of Investigative Journalists. That news broke on Monday, February 9. The Clinton bombshell came the next day, Tuesday, February 10, when the Guardian reported that seven clients of the Swiss … Continue reading →

By Pam Martens and Russ Martens: February 17, 2015 Last Thursday, the Office of Financial Research (OFR), part of the Federal boondoggle created under the Dodd-Frank financial reform legislation in 2010 to foster the illusion that the government was reining in risk on Wall Street, released a new study showing almost unfathomable levels of systemic and interconnected risk among the too-big-to-fail banks that cratered the U.S. financial system in 2008 and has left our economy still struggling to right itself. Authored by Meraj Allahrakha, Paul Glasserman, and H. Peyton Young, the report reconfirms to Americans that nothing significant has been accomplished in the last six years to prevent casino capitalism on Wall Street from crashing our financial system and the U.S. economy again. The report found that five U.S. banks had high contagion index values — Citigroup, JPMorgan, Morgan Stanley, Bank of America, and Goldman Sachs. The authors write: “…the … Continue reading →

By Pam Martens and Russ Martens: February 12, 2015 The “thriving” U.S. economy as reported in a Bloomberg News headline this morning – a characterization which supports the U.S. central bank’s position and little else – was further undermined by the 8:30 a.m. release of retail sales for January, which dramatically undercut analysts’ estimates and came in at a decline of 0.8 percent. January’s drop followed a negative 0.9 percent reading in December. Consumer spending represents roughly 70 percent of Gross Domestic Product (GDP) growth in the U.S. If the consumer is retrenching, despite all the prognostications for all that extra money sluicing through their bank accounts from cheaper gas at the pump and lower heating fuel bills, the economy can hardly said to be “thriving.” The troublesome headline at Bloomberg News this morning was this: “Who’s Afraid of the Rising Dollar? Not the Thriving U.S. Economy.” The article, by … Continue reading →

By Pam Martens and Russ Martens: February 11, 2015 Increasingly, the Federal Reserve appears to be telling Americans: don’t believe your lying eyes — or ears. Yesterday afternoon, Steve Ricchiuto, Chief U.S. Economist at Mizuho Securities USA, gave a gutsy interview on CNBC where he called into further question the Fed’s kooky talk of an accelerating economy that needs a rate hike to rein it in. Ricchiuto has a Masters Degree in Economics from Columbia University – one of those pesky, street smart guys who know a load of bull when he hears it and doesn’t mind telling you so. Ricchiuto had this to say on CNBC: “The deflation story is very, very critical but there’s also this wrong concept that I keep hearing over and over again in the financial press about this acceleration in economic growth. That isn’t happening. Last month we had a horrible retail sales number. … Continue reading →

By Pam Martens: February 10, 2015  Citigroup read a lot of people’s minds yesterday who have been quietly wondering what happens to the price of oil when the glut becomes so extreme that the world runs out of storage containers to hold the oversupply or the cost of storage becomes uneconomic as the price of oil languishes. Citigroup’s head of commodity research, Edward Morse, wrote in a report yesterday that “Not only is the market oversupplied, but the consequent inventory build looks likely to continue toward storage tank tops.” Morse said the oversupply could push U.S. domestic crude, West Texas Intermediate or WTI, below $40 and possibly into the “$20 range for a while.” WTI is trading currently at $52.29 in early morning trade. On the basis of the Citigroup report, CNN ran the headline: “End of OPEC Is Closer to Reality.” Adding to the end of OPEC thesis, the … Continue reading →

By Pam Martens and Russ Martens: February 9, 2015 For the second time in seven months, an employee of JPMorgan Chase is alleged to have brutally murdered his wife and then taken his own life. According to Bergen County, New Jersey Prosecutor John Molinelli and police reports, 27-year old Michael A. Tabacchi and his wife, Iran Pars Tabacchi (who also went by the name Denise) were discovered dead on Friday evening, February 7, in their home in Closter, New Jersey. Their infant son was in the home and unharmed. He is under the care of the paternal grandparents. A text message from the home had been sent to the father of Michael Tabacchi asking him to come to the home, according to media reports. The father found the couple. County Prosecutor Molinelli seems to have made short work of his investigation, tweeting yesterday: “Autopsy on Closter couple shows wife died … Continue reading →

By Pam Martens and Russ Martens: February 5, 2015 Years of unending news stories on U.S. government programs of surveillance, rendition and torture have apparently chilled the speech of even top business executives in the United States. Yesterday, Jim Clifton, the Chairman and CEO of Gallup, an iconic U.S. company dating back to 1935, told CNBC that he was worried he might “suddenly disappear” and not make it home that evening if he disputed the accuracy of what the U.S. government is reporting as unemployed Americans. The CNBC interview came one day after Clifton had penned a gutsy opinion piece on Gallup’s web site, defiantly calling the government’s 5.6 percent unemployment figure “The Big Lie” in the article’s headline. His appearance on CNBC was apparently to walk back the “lie” part of the title and reframe the jobs data as just hopelessly deceptive. Clifton stated the following on CNBC: “I … Continue reading →

By Pam Martens and Russ Martens: February 4, 2015 The monetary policy arm of the U.S. central bank, the Federal Open Market Committee (FOMC), is getting hammered this week. On Monday, two researchers at the Federal Reserve Bank of San Francisco chastised the FOMC for effectively wearing rose-colored glasses since 2007 and getting the rate of economic growth mostly dead wrong. (More on that later in this article.) Yesterday, in a speech before the Minnesota Bankers Association, Narayana Kocherlakota, President of the Federal Reserve Bank of Minneapolis said that if one applied a corporate performance measurement to the FOMC’s dual job assignment from Congress of promoting price stability and maximum employment, then the FOMC has “underperformed in the past three years” on both measures. The reason the FOMC has underperformed according to Kocherlakota is that it did not provide adequate stimulus. The Fed President told the audience: “What concrete actions … Continue reading →

By Pam Martens: February 3, 2015 Yesterday, Emily Glazer and Christina Rexrode penned an article for the Wall Street Journal on the regulatory focus that is coming to bear on the culture in the biggest Wall Street banks. (We’d link to the story did it not have a paywall blocking the contents.) Wall Street Journal Editor in Chief Gerard Baker gave the article a plug in his column yesterday with a jab – not at the banks but at the regulators: “The banking sector, already under fierce regulatory scrutiny since the financial crisis that has resulted in tens of billions of dollars in fines, faces a new and apparently even more arbitrary intervention from the regulators. Our story looks at how the issue of ‘culture’ is taking on added urgency as U.S. banks await feedback expected around March from the Fed’s annual ‘stress tests,’ which are supposed to ensure that … Continue reading →

By Pam Martens and Russ Martens: February 2, 2015 It was just last Wednesday that the U.S. central bank, the Federal Reserve, released its monetary policy statement and reassured the markets that “economic activity has been expanding at a solid pace” with “strong job gains.” This cheery U.S. news came on the heels of recent action by seven foreign central banks to slash interest rates and/or pump more stimulus funds to head off an economic train wreck around the rest of the globe. The Fed statement also came on the heels of thousands of job cut announcements by companies like American Express (4,000), Schlumberger (9,000), IBM (at least 2,000), Baker Hughes (7,000), and Coca Cola (1,600 to 1,800). What’s happening among U.S. retailers is also not suggesting strong job gains. Since December, there has been a steady pace of bankruptcy filings and announcements by retailers  to close all stores and … Continue reading →