By Pam Martens and Russ Martens: February 17, 2014 The probability of two vibrant young men in their 30s who are employed by the same global bank but separated by an ocean dying within six days of each other is remote. And few companies are in as good a position to understand just how remote as is JPMorgan: since 2010, it has received four patents on quantifying longevity risks and structuring wagers via death derivatives. The two deaths at JPMorgan remain unexplained. Gabriel Magee, a 39-year old technology Vice President was found dead on the 9th level rooftop of JPMorgan’s European headquarters at 25 Bank Street in the Canary Wharf section of London on January 28 of this year. A London coroner’s inquest is scheduled for May 15 to determine the cause of death. Six days later, Ryan Crane, a 37-year old Executive Director involved in trading at JPMorgan’s New … Continue reading →

By Pam Martens: February 13, 2014 The new Chair of the Federal Reserve Board, Janet Yellen, is one of the most seasoned and knowledgeable central bank chiefs in the 100-year history of the Fed. But there was one sentence in Yellen’s testimony on Tuesday before the U.S. House Financial Services Committee which is alarming. Yellen told the Congressional panel: “Inflation remained low as the economy picked up strength, with both the headline and core personal consumption expenditures, or PCE, price indexes rising only about 1 percent last year, well below the FOMC’s 2 percent objective for inflation over the longer run.” A strong economy is incompatible with declining inflation. One or the other will win out. In a consumer based economy such as the United States, where personal consumption represents 70 percent of GDP, preventing deflation from getting a foothold is prominently on the Fed Chair’s radar screen, whether it … Continue reading →

By Pam Martens and Russ Martens: February 12, 2014 The nonstop crime news swirling around JPMorgan Chase for a solid 18 months has started to feel a little spooky – they do lots of crime but never any time; and with each closed case, a trail of unanswered questions remains in the public’s mind. Just last month, JPMorgan Chase acknowledged that it facilitated the largest Ponzi scheme in history, looking the other way as Bernie Madoff brazenly turned his business bank account at JPMorgan Chase into an unprecedented money laundering operation that would have set off bells, whistles and sirens at any other bank. The U.S. Justice Department allowed JPMorgan to pay $1.7 billion and sign a deferred prosecution agreement, meaning no one goes to jail at JPMorgan — again. The largest question that no one can or will answer is how the compliance, legal and anti-money laundering personnel at … Continue reading →

By Pam Martens: February 11, 2014 Janet Yellen, the newly installed Chair of the Federal Reserve Board of Governors, will face her first Congressional grilling as Fed Chair today before the House Financial Services Committee. That Committee is chaired by Jeb Hensarling, a staunch conservative, who has turned the web site for the Committee into a billboard for self promotion and the Koch Party platform for small government, deregulation, and partisan attacks. Below is the written testimony that Yellen will deliver this morning at 10:00 a.m. before the Committee. ————- Chair Janet L. Yellen, Semiannual Monetary Policy Report to the Congress Before the Committee on Financial Services, U.S. House of Representatives, Washington, D.C. February 11, 2014 Chairman Hensarling, Ranking Member Waters and other members of the Committee, I am pleased to present the Federal Reserve’s semiannual Monetary Policy Report to the Congress. In my remarks today, I will discuss the current … Continue reading →

By Pam Martens: February 9, 2014 London Police have confirmed that an official investigation is underway into the death of a 39-year old JPMorgan Vice President whose body was found on the 9th floor rooftop of a JPMorgan building in Canary Wharf two weeks ago. The news reports at the time of the incident of Gabriel (Gabe) Magee’s “non suspicious” death by “suicide” resulting from his reported leap from the 33rd level rooftop of JPMorgan’s European headquarters building in London have turned out to be every bit as reliable as CEO Jamie Dimon’s initial response to press reports on the London Whale trading scandal in 2012 as a “tempest in a teapot.” An intense investigation is now underway into the details of exactly how Magee died and why his death was so quickly labeled “non suspicious.” An upcoming Coroner’s inquest will reveal the details of that investigation. It’s becoming clear … Continue reading →

By Pam Martens: February 6, 2014 Some of the Republicans on the House Financial Services Committee sounded more like Wall Street lobbyists than legislators yesterday as they whined and moaned about the Volcker Rule, a provision of the Dodd–Frank Wall Street Reform and Consumer Protection Act; financial reform legislation that was enacted into law in 2010 by a duly held vote of their august body following the greatest financial collapse since the Great Depression. The Volcker Rule bans proprietary trading – trading for the house – unless it is a legitimate market making activity or a specifically aligned hedge. While Wall Street On Parade is no fan of the revolving door executives at some of the key regulators, it has to be said that the patience exhibited by the regulators yesterday to suffer fools on this Congressional panel was, at least, a testament to their professionalism when appearing before the … Continue reading →

By Pam Martens: February 5, 2014 Yesterday, Martin Wheatley, the Chief Executive of Britain’s top financial regulator, the Financial Conduct Authority (FCA), testified before Parliament’s Treasury Select Committee that the public has valid reasons not to trust the way that rates are set in the foreign currency exchange markets “because of what they’ve seen and the stories that they’ve seen come out.” Global investigators have accumulated evidence that strongly suggests that traders at the too-big-to-fail banks have been rigging foreign exchange rates in much the same manner that they rigged the interest rate benchmark, Libor. Unfortunately for the public, Wheatley said it is likely that the investigation will drag into 2015, meaning the public will just have to go on not trusting a marketplace that trades $5.3 trillion a day. (Is this any way to run a global financial system or have we permanently entered the Alice in Wonderland world … Continue reading →

By Pam Martens: February 4, 2014 From the very moment one starts a career as a rookie on Wall Street, you are taught the number one Golden Rule of investing by your elders: “Don’t fight the Fed.” If the Fed is hell bent on pumping liquidity into the markets, don’t fight the bull thesis. If the Fed is, for whatever reason, forced to drain that liquidity from the markets, head for the exits before you’re trampled by a stampeding herd. On September 13, 2012, the Fed’s Open Market Committee (FOMC) announced it would begin buying “agency mortgage-backed securities at a pace of $40 billion per month.” A mere three months later, it more than doubled the ante with this announcement on December 12: “To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee will … Continue reading →

By Pam Martens: February 3, 2014 In a span of four days last week, two current executives and one recently retired top ranking executive of major financial firms were found dead. Both media and police have been quick to label the deaths as likely suicides. Missing from the reports is the salient fact that all three of the financial firms the executives worked for are under investigation for potentially serious financial fraud. The deaths began on Sunday, January 26. London police reported that William Broeksmit, a top executive at Deutsche Bank who had retired in 2013, had been found hanged in his home in the South Kensington section of London. The day after Broeksmit was pronounced dead, Eric Ben-Artzi, a former risk analyst turned whistleblower at Deutsche Bank, was scheduled to speak at Auburn University in Alabama on his allegations that Deutsche had hid $12 billion in losses during the … Continue reading →

By Pam Martens: January 30, 2014 Yesterday, the White House transported a little cherry table with the Presidential seal for a signing event in West Mifflin, Pennsylvania. President Obama was visiting workers at a U.S. Steel Corporation manufacturing plant there and used the occasion to officially sign the order creating the new MyRA, a retirement account with low dollar minimums for participation. The Presidential Memorandum, surprisingly, was devoid of any salient details of how the MyRA would work and effectively gave the U.S. Treasury Secretary, Jack Lew, carte blanche to tailor the account as long as it complied with the following: “By December 31, 2014, you shall finalize the development of a new retirement savings security that can be made available through employers to their employees. This security shall be focused on reaching new and small-dollar savers and shall have low barriers to entry, including a low minimum opening amount.” … Continue reading →