Search Results for: Federal Reserve

By Pam Martens and Russ Martens: August 9, 2022 ~ The Federal Reserve recently released its 2021 Annual Report. We decided to peruse its wonky pages. We came upon a passage that gave us pause. It read: “As of year-end 2021, a total of 135 foreign banks from 48 countries operated 144 state-licensed branches and agencies, of which 6 were insured by the FDIC, and 50 OCC-licensed branches and agencies, of which 4 were insured by the FDIC… Altogether, the U.S. offices of these foreign banks controlled approximately 17 percent of U.S. commercial banking assets.” The FDIC (Federal Deposit Insurance Corporation) is a federal agency. Its federal deposit insurance is backstopped by the U.S. taxpayer. Why should U.S. taxpayers be insuring foreign bank deposits in the U.S. – especially since federal regulators cannot even provide adequate oversight of domestic megabanks? We knew that big foreign banks like Barclays, UBS, Deutsche Bank, … Continue reading →

By Pam Martens and Russ Martens: August 8, 2022 ~ The Fed is doing something it’s never been allowed to do in its 109 years of operation. And, it’s doing it without any pushback from Congress. The Fed draws its statutory authority from the Federal Reserve Act of 1913 which created the Fed’s “discount window” for making loans to Fed member banks which are engaged in making loans for “agricultural, industrial or commercial purposes….” The Federal Reserve Act strictly prohibited the Fed from making loans “for the purpose of carrying or trading in stocks, bonds, or other investment securities….” After Wall Street trading casinos blew up the U.S. economy in 1929 and brought on the Great Depression of the 30s, Congress enacted the Glass-Steagall Act in 1933 which established federal deposit insurance for commercial banks and outlawed the merger of those federally-insured banks with Wall Street trading casinos (investment banks and … Continue reading →

By Pam Martens and Russ Martens: July 25, 2022 ~ His name is Rick Fleming and there is a very good chance that you’ve never heard of him. Now, there’s a very good chance that you’ll never see the reports that he meticulously compiled twice a year over the past eight years that he served in the role of Investor Advocate on behalf of retail investors at the Securities and Exchange Commission. If you click on this SEC link where his reports are supposed to be housed, you’ll find that the majority of his reports since 2019 result in an “Oops! Page Not Found” message. The role of Investor Advocate at the SEC was created under the Dodd-Frank financial reform legislation of 2010 following the greatest financial collapse since the Great Depression, which resulted from unparalleled corruption on Wall Street and inept federal oversight. The Dodd-Frank legislation clearly intended for the … Continue reading →

By Pam Martens and Russ Martens: July 22, 2022 ~ The Inspectors General of federal agencies are supposed to be the first line of defense against corruption within that agency. Increasingly, they have become part of the problem of corruption, coverups and cronyism. The January 6 House Select Committee has now stumbled upon this problem in a big way. Hopefully, it will lead to meaningful legislative reform of a seriously broken system of “watchdogs” that increasingly operate as lapdogs. According to a letter sent by Ronald L. Rowe, Assistant Director of the Secret Service, to the January 6 House Select Committee on Tuesday of this week, the Inspector General of the Department of Homeland Security (DHS), the parent agency of the Secret Service, first requested text messages from the Secret Service more than a year ago. The request covered a full month of text messages prior to and including the January … Continue reading →

By Pam Martens and Russ Martens: July 15, 2022 ~ Yesterday afternoon, Mark Bialek, the Inspector General of the Federal Reserve, released a memorandum clearing Fed Chair Jerome Powell and former Fed Vice Chair Richard Clarida of wrongdoing in the trading scandal that has engulfed multiple officials of the Federal Reserve. Curiously, that memorandum came just one day after Senator Sherrod Brown, Chair of the Senate Banking Committee, and four other Democratic colleagues in the Senate, sent Powell a letter about the trading scandal. The letter suggested that Powell was hampering the investigation and took him to task for failing to put the force of law and a chain of command in place for the Fed’s newly upgraded trading restrictions. Even more curious, the memorandum from the Fed’s Inspector General came just hours after Wall Street On Parade reported on Senator Brown’s letter and called attention to the fact that the … Continue reading →

By Pam Martens and Russ Martens: July 14, 2022 ~ This month marks the 10th month since the worst insider trading scandal in the 109-year history of the Fed made media headlines. Yesterday, Senator Sherrod Brown, the Chair of the Senate Banking Committee, along with two of his fellow Senators on that Committee (Jon Ossoff and Raphael Warnock) and two additional Senators who do not serve on that Committee (Jeff Merkley and Kirsten Gillibrand) sent a stunning letter to Federal Reserve Chairman Jerome Powell. The overall thrust of the letter suggested that the Fed had attempted to quiet public outrage over the Fed’s trading scandal by issuing new trading conduct rules for Fed officials but had failed to put the force of law behind those rules or set up a proper chain of command. But three sentences in the letter also strongly suggest that the Fed Chairman is actually hampering the … Continue reading →

By Pam Martens and Russ Martens: July 12, 2022 ~ On May 4, 2020, while Jay Clayton was the Chairman of the Securities and Exchange Commission in the Trump administration, the SEC granted approval for a new national stock exchange called MEMX, whose Wall Street megabank owners have admitted to a collective nine criminal felony counts brought by the U.S. Department of Justice. JPMorgan Chase accounts for five of those felony counts; Goldman Sachs and a subsidiary account for two felony counts; Citigroup and UBS account for one felony count each. The other owners of MEMX include: Bank of America, BlackRock, Charles Schwab, Citadel Securities, E*TRADE, Fidelity Investments, Flow Traders, Jane Street, Manikay Partners, Morgan Stanley, TD Ameritrade, Virtu Financial, Wells Fargo, and Williams Trading. The SEC’s letter approving MEMX as a national securities exchange stated that the SEC was confident that MEMX would “prevent fraudulent and manipulative acts and practices, … Continue reading →

By Pam Martens and Russ Martens: June 29, 2022 ~ Last Tuesday, the Office of the Comptroller of the Currency (OCC) released its quarterly report on derivatives held at the megabanks on Wall Street. As we browsed through the standard graphs that are included in the quarterly report, one graph jumped out at us. It showed a measured growth in precious metals derivatives at insured U.S. commercial banks and savings associations over the past two decades and then an explosion in growth between the last quarter of 2021 and the end of the first quarter of this year. In just one quarter, precious metals derivatives had soared from $79.28 billion to $491.87 billion. That’s a 520 percent increase in a span of three months. (See Figure 18 at this link. The last ten years of the graph is shown above.) Having studied these quarterly reports since the 2008 financial crash, we … Continue reading →

By Pam Martens and Russ Martens: June 23, 2022 ~ Yesterday, Benzinga reported on a curious statement made by Fed Chair Jerome Powell during his appearance before the Senate Banking Committee on Wednesday. Powell was asked by Senator Kyrsten Sinema (D-AZ) if the Fed had been tracking the events in the crypto markets in the past several weeks. Powell responded that the Fed was watching those events “very carefully” but the Fed “did not see significant macro-economic implications.” The article goes on to lend credence to this observation from the Fed by noting the following: “It is important to note the entire cryptocurrency market cap is $889.25 billion versus the American GDP, which is $25.34 trillion, and an equities market that controls more than $49 trillion.” Before we drill down into the weeds of that crypto market cap figure, it’s important to note that former Fed Chair Alan Greenspan told Congress that he saw no major … Continue reading →

By Pam Martens and Russ Martens: June 8, 2022 ~ According to the Federal Reserve’s Z.1 Statistical Releases, as of December 31, 1996 the market value of stocks (“corporate equities”) held by U.S. households and U.S. nonprofits stood at $10.255 trillion. As the dot.com bubble mushroomed, by December 31, 1999 that figure stood at $19.58 trillion. By the time all of the fraudulent research that went into listing and promoting stocks came to light, household and nonprofit wealth had shrunk by $8.6 trillion. From the end of Q4 1999 to the end of Q3 2002, the market value of household and nonprofit holdings went from $19.5812 trillion to $10.9601trillion. (See chart below.) Wall Street makes big bucks from underwriting new issues of stocks (Initial Public Offerings or IPOs) and so do the Big Law firms that serve as the underwriters’ counsel. It doesn’t matter if these companies have zero business operations … Continue reading →