By Pam Martens: June 10, 2013 According to documents unearthed in a month-long search of public records, NYU Law School has created an array of nonprofits to funnel money into lavish perks for its professors. The money has been used by professors to buy multi-million dollar brownstones and condos in Manhattan and Brooklyn with portions of some loans forgiven over time. In some cases, even the interest charged on the loans has been reimbursed. The decision to use nonprofit funds to enhance the lifestyles of a select handful of professors and administrators rather than assisting students is under investigation by Senator Chuck Grassley at the Senate’s Judiciary Committee. A referral has also been made by the NYU chapter of the American Association of University Professors to the New York State Attorney General’s Charities Bureau which oversees nonprofit organizations. From the hundreds of records examined, NYU, under the leadership of President … Continue reading →

By Pam Martens: June 7, 2013 Following yesterday’s report by Glenn Greenwald in The Guardian newspaper that the U.S. government was engaged in data mining tens of millions of telephone calls, today both The Guardian and the Washington Post carry reports of a Top Secret federal government program called PRISM which allows snooping into the contents of emails, live chats and Skype communications of both Americans and foreigners. According to the Washington Post, a career intelligence officer was so deeply disturbed by first hand experience with the program that he turned over 41 PowerPoint slides and other documents about PRISM to the newspaper. The Post reports the officer stating: “They quite literally can watch your ideas form as you type.” The slides are marked Top Secret, ORCON for Originator Controlled, and NOFORN meaning no foreign access. The government is already striking out at the release of the classified information. Late yesterday, James … Continue reading →

By Pam Martens: June 6, 2013  Last evening, The Guardian newspaper published a document classified by the U.S. government as Top Secret, revealing that the Obama administration is engaged in a domestic surveillance program involving the phone records of tens of millions of Americans.  The Guardian article is written by Glenn Greenwald, formerly a columnist for Salon and author of the 2011 book With Liberty and Justice for Some: How the Law Is Used to Destroy Equality and Protect the Powerful. The publisher describes the book as a no-holds-barred indictment of a two-tiered system of justice that “ensures that the country’s political and financial class is virtually immune from prosecution, licensed to act without restraint, while the politically powerless are imprisoned with greater ease and in greater numbers than in any other country in the world…[Greenwald] shows how the media, both political parties, and the courts have abetted a process … Continue reading →

By Pam Martens: June 5, 2013  It’s not that Congress actually believes that it has passed legislation to rein in the Wall Street frauds and abuses that crashed the largest economy in the world. It’s that Congress desperately wants Americans to think it has Wall Street under control – not the other way around. That’s why there is going to be a lot of screaming and phone slamming on Capitol Hill today. Katy Burne has busted one more Wall Street illusion today with her piece on the front page of the Wall Street Journal that offers up this headline: “One of Wall Street’s Riskiest Bets Returns.”  According to Burne, two of the largest Wall Street firms are assembling Synthetic Collateralized Debt Obligations (CDOs). Adding to the Congressional angst will be the name of one of the firms involved and the location of the bankers putting the deals together: JPMorgan and London.  That … Continue reading →

By Pam Martens: June 4, 2013 The Institute for Supply Management’s (ISM) manufacturing index contracted in May to a reading of 49, the lowest level since it registered a reading of 45.8 percent in June 2009. A reading below 50 means the manufacturing sector is contracting. The data, called the PMI or Purchasing Managers’ Index, is based on a survey of more than 300 purchasing and supply executives from around the country who respond anonymously to a monthly questionnaire. With the exception of a four-year interruption during World War II, ISM has published the data monthly since 1931. Both the index and a number of its individual components showed broad-based weakness in May. ISM’s new order index registered 48.8 percent in May, a decrease of 3.5 percentage points when compared to the April reading of 52.3 percent. The Backlog of Orders Index registered 48 percent, a 5 percent drop from … Continue reading →

By Pam Martens: June 3, 2013 The New York Stock Exchange has released data showing that the amount of borrowing against assets held in brokerage accounts as of April 30, 2013 has reached an all time record. Called margin loans, investors have borrowed $384 billion against their accounts, topping the prior record of $381.4 billion in margin debt set in July 2007 – just before the onset of the financial crisis. The ramp up in margin debt has been occurring at a steady pace. It stood at $284.6 billion in June 2012; $330 billion at the end of December 2012; and has risen each month since then to reach $384 billion at the end of April 2013, according to the most recent data listed at the New York Stock Exchange. But just who is it that is taking out of all these risky loans? If it’s the small, retail investor, that should set … Continue reading →

By Pam Martens: May 31, 2013 Ignore this past week’s trading in the junk bond market at your own peril. On May 7 and May 8 of this year, junk bonds fell to record low yields of 4.97 and 4.96 percent, respectively, according to the Barclays U.S. Corporate High Yield Index. (Wall Street prefers the misleading title of “High Yield” to peddle its junk bond wares.) Back in 2008, junk bond yields were trading as high as 19 percent. (Junk bonds are those rated below Baa3 by Moody’s and below BBB- by Standard & Poor’s.) In the last two weeks, junk bond prices have been selling off as everyone from small investors, pension funds, insurance companies and mutual fund portfolio managers reassess the amount of bond support that will be coming from the Federal Reserve in the future. While prices of Treasury bonds and investment grade corporate bonds have also … Continue reading →

 By Pam Martens: May 30, 2013 Jay Sekulow is all about freedom and liberty – for some. He’s not a fan of a woman’s right to the control of her own body. He’s been a major litigator on behalf of abortion protesters’ rights. He’s a big proponent of religious freedom — for some. His nonprofit filed a lawsuit to stop the ground zero mosque. In the last two weeks, he’s been on a whirlwind of television interviews railing against the oppression of the IRS stalling the rights of his clients to get their organizations registered as tax-exempt nonprofits – some of which were political organizations with clearly no right to get registered. His clients are Tea Party groups, whose mottos invariably include the words liberty and freedom. And now it turns out, this is the same man who helped John Ashcroft write the USA Patriot Act, despised by right and left alike … Continue reading →

By Pam Martens: May 29, 2013  As we reported yesterday, Jay Sekulow has spent the last two weeks burning shoe leather racing from one network studio to the next to pump up an IRS “scandal.” Now Sekulow has a lot of explaining to do as to why rampant conflicts of interests in his dizzying web of nonprofit groups were never reined in – even after being exposed in 2011 in the pages of USA Today.  New documents have surfaced in Sekulow’s operations, raising questions about his business dealings with former U.S. Attorney General John Ashcroft and television evangelist Pat Robertson.  One month after stepping down as U.S. Attorney General in 2005, John Ashcroft accepted a part-time teaching position at Regent University, a Christian institution founded by Robertson, who is currently Chancellor and Executive Chairman at the University. Ashcroft has remained at Regent University, currently serving as Distinguished Professor of Law and … Continue reading →

By Pam Martens: May 28, 2013  Jay Sekulow will never be accused of a lack of audacity. The man who has orchestrated and pumped the “scandal” that the IRS was unfairly targeting nonprofits tied to the Tea Party, is the same man who filed 27 applications with the IRS in recent years seeking tax-exempt status for Tea Party and related groups. He’s also the man who together with family and business interests have reaped at least $40 million since 1998 from a tangled web of IRS approved nonprofits with eye-popping conflicts of interest. In the early days of the IRS controversy, Jay Sekulow was a major source of information for network news. On May 13, he framed the controversy for CBS News and the PBS Newshour. Two days later he appeared on GBTV with Glenn Beck, framing the current IRS matter as “worse” than in the days of Nixon. He also appeared on the … Continue reading →