By Pam Martens and Russ Martens: October 14, 2014 Yes, there is a wall of worry that the stock market is no longer climbing but is now descending. The greatest worry, that makes all others pale in comparison, is that the U.S. central bank, the Federal Reserve, has nothing left in its monetary arsenal but one bullet – Fed-Speak, otherwise known as spin. After three bond buying programs known as Quantitative Easing (QE) flooded Wall Street with bountiful amounts of play money while failing to significantly lift wages or economic growth, the U.S. central bank now has a balance sheet that has quadrupled since the 2008 crisis to $4.4 trillion. That it would be allowed to engage in QE4 in the next crisis is highly doubtful since QEs have proven to be financial bubble makers, income inequality makers and of little help to the average citizen. Equally problematic, the Fed … Continue reading →

By Pam Martens and Russ Martens: October 13, 2014 It was only a matter of time until the evidence became irrefutable that the only way out of a global deflation on the order of the Great Depression was to address the fact that 571 U.S. billionaires simply don’t have enough hours in the day to spend adequate money to buy enough goods that would require the restocking of shelves, create new factory orders and thereby ramp up job hiring to keep a nation of 317 million people afloat. A nation where the top 10 percent reaps more than 50 percent of the income is doomed to end up in the quicksand of deflation, dragging down the rich along with everyone else. The Federal Reserve’s timidity to address this reality since the crisis of 2008, as the national debt ballooned and its own balance sheet quadrupled, has now put it in … Continue reading →

By Pam Martens and Russ Martens: October 10, 2014 Here’s the action of the Dow Jones Industrial Average on Tuesday, Wednesday and Thursday of this week: down 273 points; up 274.8 points; down 334.97 points. In the span of a week the stock market has taken investors on a stomach-churning roller-coaster ride and futures are pointing to a weak open this morning. What’s rattling the market? Headlines have incorrectly simplified the worry to concerns on global growth. But that inadequately explains the underlying fears that are causing the gyrations and sending the timid to the exits. Wall Street On Parade will have an in-depth analysis of the core issues this coming Monday.

By Pam Martens: October 9, 2014 There were some interesting moves in the Chicago futures markets yesterday that might have been an effort to instill fear in traders that were short the market ahead of the release of the Fed’s minutes slated for unveiling at 2 p.m. Getting the party started early could induce panic short covering if the Fed minutes suggested a dovish approach to raising interest rates – which indeed they did. The stock market had been down as much as 55 points around the 11 a.m. hour but began a gradual advance ahead of the release, with a surge to close up 274.8 points higher on the Dow Jones Industrial Average. Looking a bit psychotic, that move of more than 329 points peak to trough followed by just one day a loss of 273 points in the Dow. Eric Hunsader, chart watcher and computer whiz who heads … Continue reading →

By Pam Martens and Russ Martens: October 8, 2014 In July 2013 and again this past January, the U.S. Senate’s Subcommittee on Financial Institutions and Consumer Protection, part of Senate Banking, convened hearings to get a handle on the extensive physical commodity holdings of Wall Street banks. At the January hearing, Senator Sherrod Brown, chair of the Subcommittee, told hearing participants that “the six largest U.S. bank holding companies have 14,420 subsidiaries, only 19 of which are traditional banks.” At the time of the July 2013 hearing, Morgan Stanley, one of the nation’s largest retail brokerage firms, an investment bank, as well as an FDIC insured depository bank, owned sprawling crude oil operations. Congress had been aware of Morgan Stanley’s foray into the oil business since at least 2009 when 60 Minutes reported that Morgan Stanley had acquired the capacity to store 20 million barrels of oil. Ostensibly as a … Continue reading →

Pam Martens and Russ Martens: October 7, 2014 In the mid 1980s, there was a different King and a different oil minister in Saudi Arabia than present today, but, other than that, the threat of an oil price war within the ranks of OPEC has all the hallmarks of early 1986. Typically, cartels like OPEC are supposed to act in unison on prices. But last Wednesday, Saudi Arabia’s state-owned oil company, Saudi Aramco, stunned world oil markets by acting alone in cutting its official crude price by $1 per barrel for November deliveries to its Asian customers. It also dropped its price by approximately 40 cents per barrel to U.S. and European customers. If this is the opening salvo of a replay of 1986, be forewarned that crude oil prices plunged by over 50 percent in less than eight months in that era. The Saudi oil minister in 1986 was … Continue reading →

By Pam Martens and Russ Martens: October 6, 2014 America’s central bank, the Federal Reserve, has a credibility problem and a management crisis unique to its unusual structure. If the Chair of the Federal Reserve Board of Governors, Janet Yellen, had any real management powers, she would have immediately asked William Dudley, President of the New York Fed, to step down after internal tape recordings revealed that his staff rubber stamps “legal but shady” deals at the big Wall Street banks it supervises. “Legal but shady” and patently illegal dressed up as just shady deals collapsed this Nation’s financial system only six years ago and continues to depress the country’s economic growth. The tapes were released by former New York Fed bank examiner, Carmen Segarra, via the public interest web site ProPublica and public radio’s “This American Life.” Segarra is suing the New York Fed, charging that she was terminated … Continue reading →

By Pam Martens and Russ Martens: October 2, 2014 Martin Smith, producer extraordinaire of some of the most riveting documentaries for the PBS program, Frontline, has received the 2014 John Chancellor Award for Excellence in Journalism, presented by the Columbia University Graduate School of Journalism. Typically, our reaction to journalism awards is akin to that of the late Alex Cockburn, author, columnist and long-time co-editor of the sassy CounterPunch.com web site, who had this to say on the subject in 2009: “…as a rule CounterPunch disapproves of the endless prizes the journalism industry awards itself. Many years ago, the great editor of Le Monde, Hubert Beuve-Mery, let it be known that anyone at his newspaper accepting an award would be fired. These farcical rituals peak in the annual absurdities of the Pulitzers… “Now I see that another CounterPuncher has been given a major journalism prize. His newspaper reports that ‘Patrick … Continue reading →

 By Pam Martens and Russ Martens: October 1, 2014 Wall Street’s crime spree has been coming at the public for the past six years like a geyser spewing from a broken water main. It’s been tough for the public to keep track of the twists and turns, and equally so for Congress. What has been lost in all the media frenzy over the tapes released by Carmen Segarra, an attorney and bank examiner at the New York Fed who was fired for wanting to hold Goldman Sachs accountable, according to her lawsuit, is that four other regulatory lawyers have stepped forward from 2006 to earlier this year to report that their Wall Street regulator has been captured. In the case of those four, the captured regulator is the Securities and Exchange Commission. When you have five Wall Street insiders with law degrees telling you that Wall Street regulators are not … Continue reading →

By Pam Martens and Russ Martens: September 30, 2014 Four noted economists have issued a report under the umbrellas of the International Center for Monetary and Banking Studies and the Centre for Economic Policy Research (CEPR) that is raising alarm bells at global central banks. According to the report: “The world is still leveraging up; an overall, global deleveraging process to bring down the total debt-to-GDP ratio – or even to reduce its growth rate – has not yet started. On the contrary, the debt ratio is still rising to all-time highs.” This, say the authors, has produced an “ongoing vicious circle of leverage and policy attempts to deleverage, on the one hand, and slower nominal growth on the other,” setting the basis “for either a slow, painful process of deleveraging or for another crisis, possibly this time originating in emerging economies (with China posing the highest risk).” These are … Continue reading →