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 →

By Pam Martens: December 22, 2014 Last week members of both the House and Senate were issuing press releases to express their outrage over the sneaky repeal of a Dodd-Frank financial reform provision meant to stop giant Wall Street banks from using FDIC-insured bank affiliates to make wild gambles in derivatives, thus putting the U.S. economy in grave danger again and the taxpayer at risk for another behemoth bailout. What was the Federal regulator of these very same banks doing? It was bragging in a press release issued at the end of the same  week about the gargantuan risks these  insured banks were taking in derivatives. The press release was issued on Friday, December 19, 2014 by the Office of the Comptroller of the Currency (OCC), the regulator of all national banks which is mandated to make sure that insured banks “operate in a safe and sound manner.” The press … Continue reading →

By Pam Martens and Russ Martens: December 18, 2014 There has been much focus on the fiery speeches that Senator Elizabeth Warren delivered from the Senate floor in an effort to stop the roll-back of a key derivatives provision of the Dodd-Frank financial reform legislation that was slipped into the giant $1.1 trillion spending bill that was signed into law this week by President Obama – who campaigned for passage of the bill despite the weakening of protections against Wall Street abuses. The bill became known as the Cromnibus because it is part Continuing Resolution and part Omnibus spending bill to fund the government through September of 2015. Those who voted against the bill in the Senate are provided here; in the House, here. But Warren was far from alone in expressing outrage at Citigroup writing most of the provision  that was quietly slipped into a spending bill that was critical … Continue reading →

By Pam Martens: December 17, 2014 Wall Street On Parade holds great respect for Paul Krugman as an economist. We link regularly to his columns under our “Publisher’s Must Reads.” But every time Krugman posits on Dodd-Frank financial reform or the crash of 2008 he blunders into the quagmire created by financial reporter Andrew Ross Sorkin’s misinformation campaign in the pages of the New York Times. Take this past Monday for example. Krugman devoted his column to the spending bill just passed by Congress that guts a key derivatives provision of the Dodd-Frank financial reform legislation, writing that “One of the goals of financial reform was to stop banks from taking big risks with depositors’ money. Why? Well, bank deposits are insured against loss, and this creates a well-known problem of ‘moral hazard’: If banks are free to gamble, they can play a game of heads we win, tails the … Continue reading →

By Pam Martens: December 16, 2014 Citigroup is the Wall Street mega bank that forced the repeal of the Glass-Steagall Act in 1999; blew itself up as a result of the repeal in 2008; was propped back up with the largest taxpayer bailout in the history of the world even though it was insolvent and didn’t qualify for a bailout; has now written its own legislation to de-regulate itself; got the President of the United States to lobby for its passage; and received an up vote from both houses of Congress in less than a week. And there is one more thing you should know at the outset about Citigroup: it didn’t just have a hand in bringing the country to its knees in 2008; it was a key participant in the 1929 collapse under the moniker National City Bank. Both the U.S. Senate’s investigation of the collapse of the … Continue reading →

By Pam Martens: December 15, 2014 Today we welcome former SEC attorney, James A. Kidney, as a guest columnist to our front page. Mr. Kidney brings 25 years of SEC experience and wisdom to the conversation. Here’s the backdrop: The U.S. Department of Justice has been burning through millions of dollars of taxpayer money chasing down suspected insider traders who are four and five times removed from the person leaking inside information; convening grand juries to indict the traders; convincing trial courts to send them off to prison. The Securities and Exchange Commission has gone after the same individuals, banning them for life from the industry. That’s the same DOJ and SEC that have failed to bring charges against one CEO of a major Wall Street firm for the crash of 2008 — the greatest and most corrupt financial collapse since the Great Depression. Last week, in a wide-reaching decision, … Continue reading →

By Pam Martens and Russ Martens: December 11, 2014 Just as a business succeeds or fails on the basis of trust by its customers, it can also be said that a nation succeeds, over the long term, through the trust and confidence of its citizens. There are now ample warning signs that America is dangerously heading in the wrong direction. As income and wealth inequality in the United States have set records, Americans’ are acknowledging their awareness that this could not have happened without the willful participation of key institutions and leaders. Historic record lows were set at various times this year in polls measuring Americans’ trust in Congress, approval of President Obama, confidence in the Supreme Court, faith in media, and the popularity of the Democratic party – the party commonly seen to care about leveling the playing field for the little guy. This alarming level of cynicism on … Continue reading →

By Pam Martens: December 10, 2014 Yesterday, the U.S. Senate Select Committee on Intelligence released a 499-page Executive Summary of its 6,000-page report on the use of torture by the CIA during the presidency of George W. Bush. The outrage to the findings was immediate and worldwide. The New York Times called the conduct “a portrait of depravity that is hard to comprehend.” Senator John McCain, who experienced torture first-hand during the Vietnam War, said the CIA had “stained our national honor.” Stephen Kinzer, writing in the Boston Globe, said that “no one has suggested that these officers, or their superiors, were doing anything other than what elected leaders wanted them to do. By focusing on the CIA’s kidnappers, torturers, and fabulists, this report diverts us away from the central responsibility of political leaders.” Among the barbarous tactics used against the prisoners was waterboarding, sleep deprivation while standing in stress … Continue reading →

By Pam Martens: December 9, 2014 After being up as much as 2.4 percent during the session, China’s Shanghai Composite Index plummeted over 8 percent in heavy trading in a two-hour period overnight, finally closing down 5.4 percent. At least one trigger for the rout was an announcement by a stock exchange clearing agency in China that lower-rated bonds will no longer be allowed as collateral for repurchase agreements, a move that instantly impacted credit market liquidity and sent sellers into the stock market to raise cash, according to a report at Bloomberg News. China is far from the only country or market regulator that is worried. On November 25, 2014, the International Capital Market Association (ICMA) released a study by Andy Hill on the European corporate bond market which found that “A commonly held view is that a correction to the credit rally is inevitable and is likely to … Continue reading →