By Pam Martens and Russ Martens: May 17, 2023 ~ Last year, newspapers across America were buzzing with the enticing yields available on U.S. savings bonds, Treasury bills and Treasury notes. It’s now apparent that millions of Americans got the message to move out of the meager yields being offered on savings accounts and money market at their bank and move to the free accounts and government-backed instruments offered by TreasuryDirect.gov. Investors, small and large, can buy directly from the U.S. Treasury at this site. According to data provided by TreasuryDirect, new account openings in 2022 surged to a total of 2,956,790 from a total of 460,057 in 2021 – an increase of 543 percent in one year. Even more impressive, the total par value of the savings bonds and Treasury securities purchased in those accounts went from $9,711,113,646 in 2021 to $87,775,900,168 in 2022 – an 804 percent increase. (See … Continue reading →

By Pam Martens and Russ Martens: May 16, 2023 ~ The pileup of conflicts of interests, ethical lapses, and overall moral turpitude at the Federal Reserve have resulted in a recent Gallup poll showing that confidence in the Federal Reserve Chair (currently Jerome Powell) has reached the lowest point in two decades of Gallup polling on this topic. Americans who have “a great deal” or “a fair amount” of confidence in the Fed Chair stands at just 36 percent according to the poll. Tomorrow, the Senate Banking’s Subcommittee on Economic Policy plans to confront the ethically-challenged structure of the Fed head on. It is a given that there will be some fireworks during this hearing because the Chair of this Subcommittee is Senator Elizabeth Warren, who has labeled Fed Chair Powell “a dangerous man” and called out a “culture of corruption” at the Fed last August. (Warren, a former Harvard Law … Continue reading →

By Pam Martens and Russ Martens: May 15, 2023 ~ If you have been following the banking crisis, you have likely read at least a dozen times that on March 12 federal banking regulators, with the consent of the U.S. Treasury Secretary Janet Yellen, invoked the “systemic risk exception” in order to protect both insured and uninsured depositors at the two banks that failed in March – Silicon Valley Bank and Signature Bank. That’s why there were gasps of shock on Saturday evening at around 5:30 p.m. when the Wall Street Journal (paywall) published the stunning news that depositors in the Cayman Islands’ branch of Silicon Valley Bank had their deposits seized by the Federal Deposit Insurance Corporation (FDIC), which they are unlikely to ever see again. As Wall Street On Parade has previously reported, under statute, the FDIC cannot insure deposits held on foreign soil by U.S. banks. What it … Continue reading →

By Pam Martens and Russ Martens: May 11, 2023 ~ If the dark secrets about the U.S. banking system that federal regulators have been keeping since the financial crash of 2008 are allowed to be aired in public Congressional hearings as a result of the current banking crisis – and mainstream media will grow a backbone and cover those hearings – it could help the U.S. avoid a catastrophic financial reckoning down the road. For years, Wall Street On Parade has been reporting that just four banks in the U.S. control more than 85 percent of all the opaque derivatives in the banking system. We have also regularly reported how federal agencies have singled out these four banks for posing systemic risk to the financial stability of the United States. We’re talking about JPMorgan Chase, Bank of America, Wells Fargo and Citigroup’s Citibank. On March 30, we crunched the numbers from … Continue reading →

By Pam Martens and Russ Martens: May 9, 2023 ~ The systemic threats to the U.S. financial system were not remedied when Congress passed the watered-down Dodd-Frank financial reform legislation in 2010. While that has been evident with each Federal Reserve bailout of the mega banks and their derivative counterparties, the threat has now gained increased urgency for Congress to confront as a result of a new academic study. A team of four highly-credentialed academics at four separate universities present compelling evidence that one of the four largest U.S. banks, with “assets above $1 trillion,” could be at risk of a bank run. The study is titled: “Monetary Tightening and U.S. Bank Fragility in 2023: Mark-to-Market Losses and Uninsured Depositor Runs?” Its authors are Erica Jiang, Assistant Professor of Finance and Business Economics at USC Marshall School of Business; Gregor Matvos, Chair in Finance at the Kellogg School of Management, Northwestern … Continue reading →

By Pam Martens and Russ Martens: May 8, 2023 ~ Since the banking crisis began making headlines at expensive media real estate, the narrative has been that deposits are fleeing the small commercial banks and flooding into the biggest banks that are perceived as too-big-to-fail and thus offer a safer venue for deposits. Because these mega banks are the same ones that the Fed has been bailing out since the financial crisis of 2008, that narrative requires believing that our fellow Americans are dumber than a stump. We decided to check out that narrative for ourselves. Not only is that scenario wrong, but it is so decidedly wrong, and it’s so easy to get the accurate figures, that from where we sit it looks like there might have been an agenda by someone to harm smaller banks. (Since it’s short sellers who have benefited to the tune of more than $7 … Continue reading →

By Pam Martens and Russ Martens: May 4, 2023 ~ Federal deposit insurance was created under the Banking Act of 1933 and became effective on January 1, 1934. Since that time, no depositor in a federally-insured bank account has ever lost a dime of their deposits if they stayed within the deposit insurance cap and they made sure that the deposit was actually in a federally-insured instrument. For example, you can’t buy the corporate bonds of a federally-insured bank and get federal deposit insurance on the bonds. You can’t walk into a federally-insured bank and sit down with a fast-talking insurance salesman and buy an insurance product, such as an annuity, and get federal deposit insurance on the annuity. You can’t walk into a federally-insured bank and sit with a wily securities salesman (a/k/a “wealth advisor”) and get federal deposit insurance on a stock mutual fund he might decide to sell … Continue reading →

By Pam Martens and Russ Martens: May 3, 2023 ~ President Joe Biden is putting the national security of the United States at risk by not suspending the short-selling of federally-insured banks. Concerns over the safety and soundness of the U.S. financial system could cause money flight out of the U.S., impacting the strength of the U.S. dollar and a loss of confidence by our foreign allies. This is also a matter that impacts the financial lives of every American, because every American – rich, poor or middle class – will suffer the consequences in terms of ability to access bank credit and higher fees on that credit as a result of rebuilding the rapidly depleting federal Deposit Insurance Fund that protects bank deposits. The second, third and fourth largest bank failures in the history of the U.S. have now occurred in the span of seven weeks (First Republic Bank, Silicon … Continue reading →

By Pam Martens and Russ Martens: May 2, 2023 ~ There are two critical things you need to know about JPMorgan Chase’s Chairman and CEO Jamie Dimon’s ability to stabilize the banking crisis: (1) he’s tried twice and failed both times; (2) his bank is a key financier of hedge funds, some of which are undermining bank stock prices with short selling. The Financial Times reported on April 5 that “Hedge funds made more than $7bn in profits by betting against bank shares during the recent crisis that rocked the sector, their biggest such haul since the 2008 financial crisis.” Shares of First Republic Bank have lost billions of dollars more in market value since April 5, meaning the $7 billion haul for short sellers is now an understatement. The one thing that would help dramatically to stem the banking crisis is for President Biden (a man who derives his powers … Continue reading →

By Pam Martens and Russ Martens: May 1, 2023 ~ On Wall Street, the business model is you eat what you kill. Jamie Dimon and the bank he helms, JPMorgan Chase, just devoured First Republic Bank after Dimon had orchestrated the worst “rescue” of First Republic in the history of banking rescues. Given the outcome, one has to wonder if this rescue flop was a bug or a feature. (See Related Articles below.) After 7 weeks of Jamie Dimon’s “rescue,” First Republic and its preferred shares had been downgraded by credit rating agencies to junk; its common stock had lost 98 percent of its market value, closing at $3.51 on Friday and at $1.90 in pre-market trading early this morning; its long-term bonds were trading at 43 cents on the dollar; and depositors continued to flee the bank. And in order to pay out all those deposits that were taking flight, … Continue reading →