By Pam Martens and Russ Martens: January 13, 2015 The U.S. Justice Department has yet to summon the courage to bring a criminal courtroom trial against JPMorgan’s top executives but a serious public trial is underway nonetheless at the website www.JPMadoff.com.  Originally styled as a venue for the public to read a free chapter a month of the book, JPMadoff: The Unholy Alliance Between America’s Biggest Bank and America’s Biggest Crook, the two attorneys who created the site have now moved into their grand jury stage, presenting hard evidence in Chapter 5 on why RICO charges can, and should, be brought against top executives at JPMorgan Chase. The book’s authors and site creators are Helen Davis Chaitman and Lance Gotthoffer. Chaitman is a nationally recognized litigator and author of The Law of Lender Liability. She is also a Bernie Madoff victim who lost a large part of her life savings to his Ponzi … Continue reading →

By Pam Martens: January 12, 2015 Barry Eichengreen, Professor of Economics and Political Science at the University of California, Berkeley, has written an essential tome contrasting the Great Depression of the 1930s with the Great Recession that began in late 2007 and deepened with the collapse of iconic Wall Street firms in 2008. Aptly titled Hall of Mirrors: The Great Depression, the Great Recession, and the Uses and Misuses of History, the book walks us through ongoing events in the U.S. and Europe during both periods. Professor Eichengreen’s book is well worth reading for the mining of nuggets such as this: “Between 1933 and 1937, real GDP in the United States grew at an annual rate of 8 percent, even though government did only passably well at these tasks. Between 2010 and 2013, by comparison, GDP growth averaged just 2 percent.” In just two sentences the Professor has encapsulated the … Continue reading →

By Pam Martens and Russ Martens: January 9, 2015 JPMorgan appears incredibly adroit at ever creative means of running its reputation through the mud. Last August the Christ Church Cathedral in Indianapolis filed a lawsuit in Federal Court alleging that its endowment funds meant to feed and shelter homeless families and children, keep food banks stocked, and give exhausted pastors a sabbatical, ended up as a wealth transfer scheme at JPMorgan. The complaint alleges that JPMorgan engaged in “self-dealing,” made “fraudulent misrepresentations,” omitted material facts about their “widespread and profound conflicts of interests and created “toxic investment products” which resulted in “the surreptitious transfer of wealth from the Christ Church Trusts to JPMorgan.” Out of the 177 different investment products JPMorgan purchased for the Christ Church endowment, the percentage of its own proprietary products that JPMorgan purchased from itself “ranged from 68% to a staggering 85% of the portfolio” according … Continue reading →

By Pam Martens: January 7, 2015 Back on October 9, 2014 when the Dow Jones Industrial Average swooned 334 points, Citigroup lost 2.55 percent on the day, very much in line with its peers. On Monday of this week, when the Dow closed down 331 points, Citigroup pulled a little ahead of the pack in terms of losses, dropping 3.15 percent. Yesterday, however, when the Dow closed down 130 points, or just 39 percent of Monday’s loss of 331 points, Citigroup pulled decisively away from its peers, losing 3.52 percent on the day to close at $50.70. It’s relevant to note at this point that Citigroup’s stock would have closed yesterday at $5.07 rather than $50.70 had it not performed a 1-for-10 reverse stock split back in 2011, stripping its shareholders of 9 shares for each 10 they owned while levitating the price to a respectable level. Citigroup back then … Continue reading →

By Pam Martens and Russ Martens: January 6, 2015 Yesterday was not an illustrious start to the first full week of the new year. The Dow Jones Industrial Average plunged 331 points on global deflation worries; U.S. crude oil dropped below $50 for the first time since 2009, with West Texas Intermediate touching $48.47 at one point on the New York Mercantile Exchange. The benchmark 10-year U.S. Treasury note, whose yield is a harbinger of future economic activity, traded below 2 percent and is yielding 1.97 percent in early morning trade today. In a strong signal that other economies are weakening around the globe, 10-year sovereign debt instruments in Australia, Austria, Belgium, Finland, France, Germany, Japan, Netherlands and the U.K. set record low yields yesterday. Against that backdrop, columnist Paul Krugman might have wished he hadn’t penned these opening words on page A17 of the New York Times yesterday: “Suddenly, … Continue reading →

By Pam Martens: January 5, 2015  Jeffrey Gundlach, the bond guru who co-founded DoubleLine  Capital in 2009 and was prescient on Treasury yields plunging in 2014, has been making some bold predictions for rates in 2015. On December 9 of last year, Gundlach told Reuters’ Jennifer Ablan that the yield on the benchmark 10-year U.S. Treasury note could fall to 1 percent this year. Gundlach is quoted as follows in the article: “I still believe that there is a danger of repeat of a Treasury meltup that 2014 did end up bringing, particularly into the crescendo of October 15. If something can’t go up, it has to go down. Yields can’t seem to go up. They might go down. And if they go down any amount again, if the 10-year goes below 2 percent, even below 2.20 percent, that’s the line in the sand I am talking about.” As of … Continue reading →

By Pam Martens: December 31, 2014 According to the U.S. central bank, the Federal Reserve, in its December 17, 2014 policy statement delivered by the Federal Open Market Committee, America has become a veritable oasis in a sea of economic turmoil. Economic activity is “expanding,” labor conditions have “improved further,” housing spending is “rising moderately,” business fixed investment is “advancing.” And that plunge in oil prices? Well, that’s going to be “transitory” and “dissipate.” The Fed’s position that the United States can wave a magic wand and delink itself from the vicious deflationary forces besetting our trading partners is the stuff of fairy tales. As of November 2014, annual rates of inflation as measured by the Consumer Price Index (CPI), showed that ten of our trading partners, mostly in the Eurozone, were experiencing deflation: Belgium: -0.110 percent Estonia: -0.614 percent Greece: -1.246 percent Hungary: -0.739 percent Israel: -0.098 percent Poland: -0.484 percent Slovenia: -0.252 percent Spain: … Continue reading →

By Pam Martens: December 30, 2014 We are watching a collapse in industrial commodity prices, including crude oil. Yields on junk bonds (high yield debt) have risen dramatically. Investors have sought out the safe haven of U.S. Treasury notes, driving the yield lower as junk bond yields rise from an exit flight out of higher risk securities. The above paragraph could just as well be describing December of 2008. Unfortunately, it’s also an apt description of where we find ourselves on December 30, 2014. Aside from the irrationally exuberant U.S. stock market, there are two other serious mismatches that don’t compute between December of 2008, in the midst of the greatest financial collapse on Wall Street since the Great Depression, and December 2014. First, the publicly traded stocks of the largest Wall Street banks were in precipitous decline in late 2008, as they should have been, since rising levels of … Continue reading →

By Pam Martens and Russ Martens: December 29, 2014 On the cold, wintry afternoon of January 11, 2014, David Bird, a reporter who covered energy markets for the Wall Street Journal, told his wife he was going out for a walk and left his home in Long Hill, New Jersey in a red jacket with yellow zippers. Despite his colorful attire, the involvement of hundreds of volunteers, law enforcement officials, and the FBI in the search, Bird has vanished without a trace. As Wall Street On Parade previously reported in January, for the three months prior to his disappearance, Bird was reporting on a supply glut and growing stockpiles of oil. A newly retrieved article by Bird that appeared on line at the Wall Street Journal on August 21, 2013, shows the reporter had also presciently made an early connection between the Federal Reserve ending its massive bond-buying program known … Continue reading →

By Pam Martens and Russ Martens: December 23, 2014 There is a mushrooming false narrative taking over the business airwaves: lower oil prices lead to lower prices at the pump which put more cash in consumers’ pockets which will lead to a more robust economy in the United States in 2015. Yes, there are certainly lower prices at the pump. Yes, that gives consumers more disposable income. But it will decidedly not lead to a more robust economy in the United States for very long. This isn’t a little speed bump in oil prices. This is one of the most dramatic and rapid crashes in a key industrial commodity in history. Since June, the price of West Texas Intermediate (WTI), the domestic crude oil produced in the U.S., is down by 47 percent. The price of the internationally traded crude oil, Brent, is down by a similar figure. If this … Continue reading →