By Pam Martens and Russ Martens: January 7, 2014 Before Timothy Geithner became the 75th Secretary of the U.S. Treasury in 2009, he served as the President of the Federal Reserve Bank of New York for five years. The New York Fed is one of Wall Street’s primary regulators. But after leaving his post at the New York Fed, Geithner testified before the U.S. House of Representatives’ Committee on Financial Services on March 26, 2009 that he was not regulating Wall Street as he earned his $400,000 a year with car, driver and private dining room. At the 2009 hearing, in response to a question from Congressman Ron Paul, Geithner said: “That was a very thoughtful set of questions. I just want to correct one thing. I have never been a regulator, for better or worse. And I think you are right to say that we have to be very … Continue reading →

By Pam Martens: January 6, 2014 The conventional wisdom is that the crash on Wall Street that continues to devastate the U.S. economy and job growth began in earnest in 2008. That’s likely because marquee Wall Street firms, in business for 75 to more than 100 years, did not blow up until 2008. Bear Stearns imploded in March of 2008 and was taken over by JPMorgan. On the same day, September 15, 2008, that Lehman Brothers filed bankruptcy, Merrill Lynch was taken over by Bank of America. Other major Wall Street firms were propped up with the largest taxpayer bailout in the history of U.S. financial markets. A careful review of the report from the Financial Crisis Inquiry Commission (FCIC), Federal Reserve documents, Fed appointment calendars, and news archives indicate clearly that the financial system began “unraveling,” (as the FCIC phrased it) in 2007. More importantly, a number of events … Continue reading →

By Pam Martens: January 2, 2014 Each business day, the President of the United States makes his daily schedule available to the press. The President is the Commander in Chief of the military, the man who signs or vetoes legislation, the individual with the power to initiate military action against another nation.  To most Americans, he is viewed as the most powerful individual in the country. If such a powerful individual involved with so many delicate negotiations can share his daily appointment calendar with the American people, why can’t the Washington money men whose mandate is also to serve the country’s interest. The U.S. Treasury Secretary’s daily appointment calendar is posted on the Treasury’s web site. The web site tells us that the calendars “are generally posted every quarter.” However, the last six months of Jack Lew’s schedule are missing from this archive. What we do know from Jack Lew’s … Continue reading →

By Pam Martens: December 31, 2013 Since December 16, major business media have failed to dig deeper into a potentially blockbuster story involving the Justice Department’s refusal to honor a Wall Street regulator’s request for a subpoena against JPMorgan Chase to obtain Madoff related documents the firm was refusing to turn over. JPMorgan Chase was Madoff’s banker for the last 22 years of his fraud. The Trustee in charge of recovering funds for Madoff’s victims, Irving Picard, said in a filing to the U.S. Supreme Court this Fall that JPMorgan stood “at the very center of Madoff’s fraud for over 20 years.” It’s a big story when a serial miscreant like JPMorgan – which has promised its regulators to change its jaded ways in exchange for settlements – risks obstruction of justice charges by denying one of its key regulators internal documents. It becomes an explosive story when the Justice … Continue reading →

By Pam Martens: December 30, 2013 The Federal Reserve System that is charged with setting monetary policy in the United States consists of a Board of Governors in Washington, D.C. and 12 regional Federal Reserve Banks. The Board of Governors functions as an independent government agency – its Board is appointed by the President of the United States but its funding comes from the regional Federal Reserve Banks. Slowly, like a tiny Goldfish in a large tank of water that grows over time into a monster fish capable of clobbering anything else placed in the tank, one of the 12 regional Federal Reserve Banks has obtained unique powers not shared by the 11 other regional Federal Reserve Banks. This is just a partial list of how the New York Fed is unique among its peers: The President of the New York Fed sits permanently on the Federal Open Market Committee … Continue reading →

By Pam Martens: December 22, 2013 PBS promised a “debate” this past Friday night on the “benefits and dangers” of the Federal Reserve as the Fed marks its 100 years of existence tomorrow. Instead of a debate, two famous stock market historians made the same stunning announcement – that the Fed has decided its job is to push up the stock market. Consuelo Mack’s Wealthtrack program on PBS had invited James Grant, Editor and Founder of Grant’s Interest Rate Observer, and Richard Sylla, the Henry Kaufman Professor of the History of Financial Institutions and Markets at NYU’s Stern School of Business. The opening scene for the program shows Sylla in a party hat lighting the candles on the Fed’s birthday cake while Grant snuffs them out – suggesting that Sylla would be making pro-Fed statements while Grant would take the opposing view. What happened during the program, however, was that … Continue reading →

By Pam Martens: December 19, 2013 If you’ve read that the stock market staged a big rally yesterday on the news that the Federal Reserve’s Federal Open Market Committee voted to begin to taper its bond buying program by $10 billion a month beginning in January, you’re in possession of half the news. Here’s how the New York Times presented that half of the news: “Stocks rallied on the Fed’s move, with the Standard & Poor’s 500-share index ending up more than 1.5 percent. Investors saw the pullback as a vote of confidence in the economy.” Investors saw no such thing. This is pure, unadulterated malarkey. By 5:34 p.m., the tell-a-lie-a-thousand-times-and-it-becomes-the-truth mantra was in control of mainstream media, with the Wall Street Journal’s MarketWatch reporting: “Two U.S. stock indexes notched record closing levels on Wednesday as markets interpreted the Federal Reserve’s decision to begin the tapering of bond purchases in … Continue reading →

By Pam Martens: December 18, 2013 On Monday, Judge Richard Leon raised a hornet’s nest of questions about the constitutionality of the government’s Orwellian spy tactics against citizens about whom it hasn’t the slightest suspicion of wrongdoing in his decision in Klayman v. Obama. Judge Leon came down on the side of Larry Klayman and Charles Strange, two of the plaintiffs suing the government over its massive collection of tens of millions of phone records of law abiding citizens, which it has given itself the right to probe and analyze for a period of five years. The lawsuit grew out of the revelations made by National Security Agency (NSA) whistleblower, Edward Snowden. The Judge found the program to be in violation of the Fourth Amendment to the U.S. Constitution, writing that he could not “imagine a more ‘indiscriminate’ and ‘arbitrary invasion’ than this systemic and high-tech collection and retention of … Continue reading →

By Pam Martens: December 17, 2013 So much for political labeling. Yesterday, a Federal Court judge appointed by George W. Bush upheld the public’s right to reasonable searches in a court case challenging the Orwellian phone snooping practices of the Obama administration, a President who rode into office on the promise of hope and change and his record as a former civil rights attorney and constitutional law professor. While not yet ruling on the merits of the case, Judge Richard Leon made it quite clear to the government where he stands. Judge Leon granted the motion for an injunction to two of the plaintiffs, Larry Klayman and Charles Strange, but placed the injunction on hold pending the outcome of the government’s appeal. He warned the government, however, to prepare its spy programs for the potential of his ruling being upheld by the Appellate Court, writing that he might institute sanctions … Continue reading →

By Pam Martens: December 16, 2013 Carmen Segarra, a former Bank Examiner at the Federal Reserve Bank of New York, has brought public attention to a little known job function at her former employer – that of the Relationship Manager. The New York Fed is assigned a priority role in oversight and regulation of some of the largest Wall Street banks. Should it be functioning as a tough cop or managing “relationships”? In October, Segarra, a lawyer, filed a lawsuit alleging that Relationship Managers at the New York Fed, who were assigned to manage the relationship with Goldman Sachs, obstructed and interfered with her investigation of the firm and tried to bully her into changing her findings. When Segarra refused to change her findings, she was fired, according to the lawsuit. The U.S. Senate’s Permanent Subcommittee on Investigations should pay close attention to the allegations in this lawsuit and open … Continue reading →