Search Results for: Federal Reserve

By Pam Martens and Russ Martens: April 12, 2022 ~ Multiple current and former Federal Reserve officials remain under investigation for the worst trading scandal in Fed history. This investigation includes the former President of the Dallas Fed, Robert Kaplan, who traded in and out of S&P 500 futures contracts in lots of “over $1 million” while sitting as a voting member of the Fed’s Open Market Committee (FOMC), which sets interest rates and makes other critical monetary policy decisions that move markets. The investigation also involves former Boston Fed President Eric Rosengren, who actively traded in a joint account with his wife, who had been given a margin account by a Fed supervised bank, Citigroup’s Citibank. (See our extensive archive on the Fed’s trading scandal.) Last Tuesday, President Biden’s nominee for Fed Vice Chair, Lael Brainard, who has been a Fed Governor since 2014 and has had a permanent voting … Continue reading →

By Pam Martens and Russ Martens: April 11, 2022 ~ On Thursday, March 31, the Federal Reserve released the names of the Wall Street trading houses and the amounts they had borrowed under three of the Fed’s emergency bailout programs. The data included the Fed’s repo loans for the first quarter of 2020 — the Fed is releasing the repo loan information after a two-year lag on a quarter-by-quarter basis, thus obfuscating a clear snapshot for the life of the program; the Fed’s Primary Dealer Credit Facility (PDCF); and the Fed’s Money Market Mutual Fund Liquidity Facility (MMLF). The Fed also released on March 31 the transaction details for its Commercial Paper Funding Facility but that essentially just showed which commercial paper had become toxic on Wall Street while the other three programs illustrated which units of the mega global banks had become illiquid and needed Fed bailouts stretching over many … Continue reading →

By Pam Martens and Russ Martens: April 6, 2022 ~ As the chart above indicates, from March 20, 2020 through May 12, 2021 the share prices of the French global bank BNP Paribas, the Canadian global bank, Royal Bank of Canada, and the German global bank, Deutsche Bank, were surging in value. But unbeknown to the marketplace, thanks to a dark curtain the Federal Reserve of the United States drew tightly around one of its secret loan programs, the trading units of these three foreign global banks were being propped up with vast sums of cheap loans during that span of time by the Fed. The secret loan program was the Primary Dealer Credit Facility (PDCF) – the same program the Fed used during and after the Wall Street collapse in 2008 to funnel $8.9 trillion in cumulative loans to foreign and domestic trading houses and banks, according to an audit … Continue reading →

By Pam Martens and Russ Martens: April 5, 2022 ~ Throughout 2020, Fed Chair Jerome Powell repeatedly testified to Congress that the banks in the U.S. had proven to be a “source of strength” during the pandemic. Last Thursday the Fed released the names of the banks and dollar amounts they had needed to borrow under some of the Fed’s emergency loan operations. The data showed that units of two of the largest depository banks in the country, JPMorgan Chase and Citigroup, had required vast sums from the Fed’s emergency repo loan operations as well as its Primary Dealer Credit Facility (PDCF). In the Fed’s first report to Congress on its Primary Dealer Credit Facility which provided a dollar amount outstanding, the Fed reported that “the total outstanding amount” as of April 14, 2020 was $34.5 billion. The PDCF was announced on March 17, 2020 and began making loans on March … Continue reading →

By Pam Martens and Russ Martens: April 4, 2022 ~ The Federal Reserve, the central bank of the United States, has a “dual mandate” to target inflation and to maintain “maximum sustainable employment.” The Fed has zero mandate to target a specified level for the Dow Jones Industrial Average or to prevent stock market crashes by printing money out of thin air and pumping it out to the trading houses on Wall Street. But under Fed Chair Ben Bernanke during the Wall Street crisis in 2008 and Fed Chair Jerome Powell in 2019-2020, that’s exactly what the Fed decided to do. The majority of the stock market is owned by the wealthiest 10 percent of Americans. Thus, when the stock market is bailed out by the Fed, which we can now show overtly occurred from March 9 through March 16 of 2020, the Fed is effectively bailing out the rich. The … Continue reading →

By Pam Martens and Russ Martens: March 31, 2022 ~ As thousands of businesses were forced to close in the U.S. as a result of the coronavirus outbreak in March of 2020, and millions of Americans were financially struggling, the Federal Reserve was pumping what would become a cumulative $3.84 trillion in secret repo loans into the U.S. trading unit of the giant French global bank, BNP Paribas, in the first quarter of 2020. The repo loan market is where banks, brokerage firms, mutual funds and others make loans to each other against safe collateral, typically Treasury securities. Repo stands for “repurchase agreement.” The Fed only comes to the rescue of this market when there is a liquidity crisis and Wall Street firms are backing away from lending to each other. September 17, 2019 was the first time the Fed had to intervene in the repo market since the financial crisis … Continue reading →

By Pam Martens and Russ Martens: March 29, 2022 ~ The above headline regarding Citadel Securities and Virtu Financial comes from a report authored by John Detrixhe that was published at Quartz in February of last year. The report found that as of December 2020 the New York Stock Exchange (NYSE) had a 19.9 percent share of stock market trading versus 13.4 for Citadel Securities and 9.4 percent for Virtu Financial. This gave Citadel Securities and Virtu a combined stock market trading share of 22.8 percent versus 19.9 for the NYSE. The big problem with this picture is that neither Citadel Securities or Virtu Financial are registered as stock exchanges and neither are regulated by the SEC as stock exchanges. Citadel Securities is a broker-dealer that pays for order flow from at least nine online brokerage firms and has a dubious history of regulatory fines and abusive behavior. Virtu Financial is … Continue reading →

By Pam Martens and Russ Martens: March 22, 2022 ~ As the headlines in mainstream media grew ever more alarming in late 2021 regarding Russia’s troop buildup around Ukraine, approximately $225 million per day (or $13.7 billion over a span of 61 days) had been waged in bets that Russia might default on its sovereign debt. These bets are known as Credit Default Swaps and can be used to hedge exposure or simply speculate on a debt default in hopes of making a profit. This information resides in a publicly-available swap repository maintained by the Depository Trust and Clearing Corporation (DTCC). For the period of September 20, 2021 through December 19, 2021, the DTCC shows that an average of 26 trades per day were being made in the Credit Default Swaps on the Russian Federation’s sovereign debt, for a daily total of $225 million notional (face amount of credit default swaps). … Continue reading →

By Pam Martens and Russ Martens: March 14, 2022 ~ Nike can’t seem to take its own advice and “just do it.” On March 3 Reuters and the Wall Street Journal reported that Nike was temporarily closing its more than 100 stores in Russia. The Wall Street Journal carried this statement from Nike: “We are deeply troubled by the devastating crisis in Ukraine and our thoughts are with all those impacted, including our employees, partners and their families in the region.” This sounds like something one might say following an act of nature – like a hurricane or a flood. It doesn’t sound appropriate for a barbaric bombing attack by Russian President Vladimir Putin on hospitals, schools and apartment buildings in Ukraine that had left hundreds of civilians dead at that point. The day after Nike’s statement to the press, we could find no official statement on Nike’s website to indicate that it … Continue reading →

By Pam Martens and Russ Martens: March 10, 2022 ~ This morning Kremlin spokesman Dmitry Peskov told reporters on a conference call that the economic sanctions imposed on Russia by the West were “absolutely unprecedented.” He went on to say that those sanctions made it “very hard to forecast anything.” Perhaps Putin should have thought about that before he invaded the neighboring country of Ukraine and launched a barbaric bombing assault on hospitals, schools, churches and apartment buildings. There are a few things we can help Russia forecast. Given the fact that the Russian currency, the Ruble, has plunged 40 percent against the U.S. Dollar since Russia’s murderous assault on Ukraine began on February 24, and the fact that the Ruble has continued to set lower lows against the U.S. Dollar since then, it’s a pretty good bet that the Ruble is not going to find a bottom. The Ruble is … Continue reading →