By Pam Martens: August 2, 2013 Jon Stewart calls them “those f*!*!ing guys. Matt Taibbi at Rolling Stone calls them “a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.” Today, they’re the Wall Street megabank that dodged securities fraud charges by greasing the hand of government with $550 million while their 34-year old salesman stood trial for the crimes. Yesterday, nine jurors found that a Goldman Sachs vice president, Fabrice Tourre, (infamously known as Fabulous Fab from an email in the case) was liable on six counts of violating federal securities law by intentionally misleading investors. Just what his penalty will be and whether he will be barred from ever working again on Wall Street will be determined at a later date. The Securities and Exchange Commission, which has no criminal powers, brought the case as a civil suit. Only … Continue reading →

By Pam Martens: August 1, 2013  President Obama met in a closed door session with the House Democratic Caucus yesterday and was told that Lawrence (Larry) Summers is a decidedly bad choice for Federal Reserve Chairman. That assessment triggered a strident response from the President. He defended Summers and praised him for his hard work during the 2008 financial crisis.  The President’s praise of Summers has been met with a new volley of press today that is keeping it fresh in the minds of the voting public that were it not for Summers’ brashness and bullying of opponents to deregulate Wall Street, repeal the Glass-Steagall Act, and keep trillions of dollars of derivatives off regulated exchanges during the Clinton administration – there might not have been a 2008 financial crisis. Summers served as both Deputy Secretary at the Treasury and Secretary during Clinton’s Presidency.  It’s tough to convince the public that a … Continue reading →

By Pam Martens: July 31, 2013  After packing his administration with 1 percenters or people earning a lucrative living off the 1 percenters, President Obama has decided, seemingly out of the blue, to hit the stump on behalf of the plight of the struggling middle class while railing against the income inequality that plagues the U.S.  Could the President’s new focus have anything to do with a new probe of Wall Street practices opened by Carl Levin and the Senate’s Permanent Subcommittee on Investigations? The Subcommittee is delving into the hoarding of physical commodities by the largest firms on Wall Street.  Whether the President is cognizant of the fact or not, the two issues are indelibly linked. Hoarding physical commodities pushes up prices on everything from the cost of food and beverage packaging to the price of a tank of gas to get to work or heating oil to stay warm … Continue reading →

By Pam Martens: July 30, 2013  The financial crimes you can’t see are the ones that can really hurt you.  When Congress, the media, the financial experts talk about transparency on Wall Street, it is always in abstract terms: we should have more transparency; we should know more details about the kinds of risks Wall Street is taking with other people’s money; we should be able to see the nature of derivatives trading being conducted in private agreements between Wall Street firms; we should make the big banks hold more capital to offset all the risks we know they’ll never let us see until it’s too late.  Unfortunately, we can’t fix Wall Street’s problems by discussing them in the abstract. We need to be comprehensively cognizant of what Wall Street has become, peel away the artifices layer by layer, and put in legislative fixes that get quickly to the problem – … Continue reading →

By Pam Martens: July 29, 2013  Half a decade has now passed since the great Wall Street collapse of 2008.  Millions of words have attempted to capture the epic greed, arrogance and corruption that brought on the greatest financial implosion since the Great Depression. The Financial Crisis Inquiry Commission issued 662 pages on the subject. The U.S. Senate and House of Representatives have held an endless stream of  hearings. Dozens of books by authors who had a front row seat to the chaos line our bookshelves and libraries.  And yet, despite all this, the President of the United States can’t seem to remember who caused the collapse of our financial system; who caused the collapse of the housing market and millions of foreclosures and the resulting joblessness that still grips the country.  President Obama can’t seem to recall that it was the financial de-regulators of the Clinton administration who bullied … Continue reading →

By Pam Martens: July 26, 2013  U.S. Attorney Preet Bharara of the Department of Justice released a criminal indictment yesterday against one of the most well known hedge funds on Wall Street, SAC Capital Advisors. Bharara said the firm had institutionalized insider trading as a business model over more than a decade, incentivizing employees who provided hot insider tips with large bonuses, which in turn molded the company into a “veritable magnet for market cheaters.” Eight former employees have been charged and six have already pleaded guilty.  In the past, when large financial firms which hold customer assets have been charged in a criminal indictment, the company has unraveled within a brief period of time.  According to media reports, the government may seek as much as $10 billion from SAC as forfeiture for the crimes committed. That raises questions about the $187 million in charitable donations that Steven A. Cohen, … Continue reading →

By Pam Martens: July 25, 2013  Yesterday, the U.S. Senate, controlled by the Democrats, joined the U.S. House of Representatives, controlled by the Republicans, in proving to Americans that political labels mean very little when it comes to Wall Street’s protection racket in Congress. Both houses of Congress have agreed on a plan to let interest rates on student loans fluctuate with financial markets, replacing the low fixed rate of 3.4 percent students previously enjoyed until July 1 of this year.  Under the Senate plan, the student loan rate is pegged to the 10-year Treasury note, with caps set extraordinarily high at 8.25 percent for undergraduates, 9.5 for graduate students and 10.5 for student loans taken out by parents. Wall Street, which also finances student loans, is very pleased with this outcome as it makes its rates more competitive with what the federal government offers. Sixteen Senate Democrats voted against the plan.  … Continue reading →

By Pam Martens: July 24, 2013  It’s time to grab a copy of the 1914 book by Louis D. Brandeis, Other People’s Money And How The Bankers Use It, to understand how Wall Street continues to engage in the greatest heist of the last two centuries. Yesterday’s Senate hearing on the Wall Street cartel that controls the London Metal Exchange drove home that point. Brandeis was an expert on the so-called “Money Trust” of that era. Today, we call it either Banksters or, simply, Wall Street. The Pujo Committee hearings in the House of Representatives between 1912 and 1913 revealed how the financial cartel of that era had gained control of large segments of industrial output in the United States; manufacturing, railroads, mining, communications and financial markets. And, of course, JPMorgan sat at the helm of the cartel. Twenty years later, in the early 1930s, along comes the Pecora Senate hearings to … Continue reading →

By Pam Martens: July 23, 2013  If you think Wall Street’s rigging of foreclosures to struggling homeowners, or rigging interest rate swaps sold to municipalities, or rigging the Libor interest rate benchmark is the extent of its cartel activities, think again. Today, in U.S. Senate chambers, expert witnesses will make the case that the London Metal Exchange (LME) has become little more than a rigged Wall Street game to benefit a handful of powerful Wall Street firms while costing consumers and the economy greatly.  The Senate Banking Subcommittee on Financial Institutions and Consumer Protection, chaired by Senator Sherrod Brown, will hold a hearing titled: “Examining Financial Holding Companies: Should Banks Control Power Plants, Warehouses, and Oil Refineries?”  Timothy Weiner, Global Risk Manager of the giant beer brewer, MillerCoors LLC, has told the Senate in his written statement that his company’s concerns about the London Metal Exchange are shared by many other companies, … Continue reading →

By Pam Martens: July 22, 2013 Barbara Hagenbaugh, a former economics reporter for USA Today, now spokesperson for the Federal Reserve, sent an Arctic chill through the sweltering heat of Wall Street on Friday with this one liner:  “The Federal Reserve regularly monitors the commodity activities of supervised firms and is reviewing the 2003 determination that certain commodity activities are complementary to financial activities and thus permissible for bank holding companies.” The unexpected statement from the Fed came just two business days before Senator Sherrod Brown will drop a few more bombshells in the direction of Broad and Wall. Brown chairs the Senate Banking Subcommittee on Financial Institutions and Consumer Protection, which will hold a hearing tomorrow titled: “Examining Financial Holding Companies: Should Banks Control Power Plants, Warehouses, and Oil Refineries?” Does that question even have to be asked given the 2008 to 2010 taxpayer bailout of these banks? Don’t feel … Continue reading →