March 14, 2021 ~ Senator Sherrod Brown (D-OH) delivered these remarks at the opening of the Senate Banking Committee hearing on March 4, 2021. “The economy isn’t physics – it’s not governed by scientific laws outside our control. It’s made up of people making choices about our values and what kind of society we want to live in. Despite what we’re constantly told on TV, most Americans share a lot of the same values – they want an economy that’s fair and just, where hard work pays off for everyone, no matter who you are or what kind of work you do, and where everyone has the economic security to raise a family and retire with dignity. “But when you look at our economy, it doesn’t reflect the society most of us want. You can’t look at decades of growing productivity, with workers getting a smaller and smaller share of … Continue reading →

Ask and it shall be given: pic.twitter.com/FcnwtuAJQT — Trevor Chow (@tmychow) March 11, 2021 By Pam Martens and Russ Martens: March 12, 2021 ~ Trevor Chow is a first-year economist and Jardine Scholar at Trinity College, part of the University of Cambridge in England. With his hilarious and profoundly thought-provoking video satire of the four most recent Chairs of the Federal Reserve singing the words to Rick Astley’s 1987 hit single, “Never Gonna Give You Up,” he has immortalized himself with us and, very likely, Nomi Prins, Senator Bernie Sanders and the family of the late, courageous reporter, Mark Pittman of Bloomberg News. All of us have attempted to bring transparency to the wayward path of the Fed. Debuting in what is sure to be the first of many such Fed singing videos are, left to right, former Fed Chairs Alan Greenspan, Ben Bernanke, Janet Yellen and the current Fed Chair, … Continue reading →

By Pam Martens and Russ Martens: March 11, 2021 ~ Welcome to the casino where the house always wins. One day after the U.S. Senate Banking Committee held a wide-ranging hearing on the price manipulation that is occurring in the shares of GameStop and other meme stocks, the high frequency traders and hedge funds and Dark Pools that are making a killing on this manipulation poked their fingers directly in the eyes of Senate lawmakers. They put on a wild trading show yesterday that basically said, “catch us if you can.” GameStop is not some penny stock operating out of a boiler room in some grimy backwater of Wall Street. GameStop is a New York Stock Exchange listed stock. It has a market capitalization of $18.48 billion. But the brazen manipulation of its stock, as both the House Financial Services Committee and Senate Banking Committee conduct investigative hearings into who’s behind … Continue reading →

By Pam Martens and Russ Martens: March 10, 2021 ~ Yesterday’s Senate Banking Committee hearing to assess if the wild trading in meme stocks like GameStop and others requires new regulations on Wall Street turned into an overall assessment that Wall Street’s capital allocation system is broken and the main function of Wall Street today is a wealth transfer system for the rich. The Chair of the Committee, Senator Sherrod Brown (D-OH) summed it up as follows: (Read his full, enlightening remarks here.) “We’ve seen Wall Street treat the markets as a game for decades – a game they always win, at the expense of pretty much everyone else. Wall Street has never been friendly to the little guy. Surely this time is no different. Yes, some regular people have had success. But fundamentally, the system is set up to funnel more wealth to the already-wealthy. Just like in Las Vegas, … Continue reading →

By Pam Martens and Russ Martens: March 9, 2021 ~ Front groups with long-term histories of funding from billionaire Charles Koch and his related entities have taken a keen interest in Congressional hearings into the manipulative trading action in the shares of GameStop, a struggling brick-and-mortar video game retailer. The Cato Institute maneuvered a seat for itself at a House Financial Services Committee hearing on the matter in February and the Mercatus Center will have a seat at today’s Senate Banking Committee hearing. Shares of GameStop soared from $18.84 on December 31 of last year to an intraday high of $483 on January 28 – an unprecedented run of 2,465 percent in four weeks. The stock price then quickly plunged and is now making a second comeback rally, closing yesterday up 41.21 percent at $194.50. Behind the scenes of this wild trading action has been a decidedly perverse trading model. … Continue reading →

By Pam Martens and Russ Martens: March 8, 2021~ We’re starting to see a pattern. When the House Financial Services Committee held its February 18 hearing on the wild, manipulative trading patterns in shares of GameStop, a right-wing front group funded with Koch money sent a surprise witness to testify. The front group was the Cato Institute, which was secretly owned by Charles and David Koch and a handful of men through much of its history. Tomorrow, the Senate Banking Committee will hold its own hearing on the GameStop matter and one of the five witnesses called to testify hails from another bastion of Koch money, influence and dubious history. The witness we’re referring to is Andrew (Andy) Vollmer, a Senior Affiliated Scholar with the Mercatus Center. It’s a safe bet this witness wasn’t invited by the Chair of the Committee, Sherrod Brown, a Democrat from Ohio, but was invited by … Continue reading →

By Pam Martens and Russ Martens: March 4, 2021 ~ Pull up a chair and get comfy. You’re about to watch the first act in what is likely to be a long-running show called “The Great Tech Wreck of Zero-Dividend Stocks.” The show’s sponsor is rising yields on U.S. Treasury notes which make tech stocks that have ballooned in price (as the Fed held interest rates artificially low) and pay no cash dividends to compete with the rising yields, particularly unattractive. As the chart above indicates, yields on the 5-year and 10-year U.S. Treasury Notes have been rising sharply since early August, with the yield more than tripling on both. The 10-year Note has moved from 0.50 percent since early August to 1.46 percent early this morning. In the same span of time, the yield on the 5-year note has spiked from 0.20 percent to 0.72 percent. The upward surge in yields … Continue reading →

By Pam Martens and Russ Martens: March 3, 2021 ~ The new, 34-year old Democratic Senator from Georgia, Jon Ossoff, let a very big cat out of the bag at yesterday’s Senate Banking hearing. For at least a year, from September 17, 2019 through at least September 30, 2020, the New York Fed, acting as an agent for the Federal Reserve, doled out a cumulative $9 trillion or more in repo loans. The Fed would say only that the money was going to some of its 24 Primary Dealers on Wall Street, without naming any specific bank receiving the money. In June of 2020, the New York Fed abruptly stopped reporting the dollar amounts it was pumping out each day. (See Watchdog Report: Fed’s Billions in Emergency Repo Loans to Wall Street Didn’t Go Away in June; They Just Went Dark.) The emergency repo loans by the Fed began months before there … Continue reading →

By Pam Martens and Russ Martens: March 2, 2021 ~ The Senate Banking Committee will convene today to conduct confirmation hearings for President Joe Biden’s nominees to fill two key Wall Street watchdog posts: Gary Gensler to Chair the Securities and Exchange Commission (SEC) and Rohit Chopra as Director of the Consumer Financial Protection Bureau (CFPB). As a result of Democrats taking control of the Senate, Sherrod Brown, a Democrat from Ohio, is the new Chair of the Senate Banking Committee. Curiously, however, the prior Republican Chair of the Senate Banking Committee, the mild-mannered Mike Crapo of Idaho, is not the Ranking Member of the Committee. He has been replaced by a man far more likely to engage in aggressive Koch-speak, Republican Senator Pat Toomey of Pennsylvania. (Toomey was all set to become the new Chair of the Senate Banking Committee but then things went south in Georgia and Democrats picked … Continue reading →

By Pam Martens and Russ Martens: March 1, 2021 ~ Beginning on September 17, 2019 – months before there was any report of a COVID-19 case anywhere in the world – the Federal Reserve turned on its money spigot to the trading houses on Wall Street. By October 23, 2019 the Fed announced that it was upping these loans to $690 billion a week – again, months before any report of COVID-19 anywhere in the world. Earlier in October 2019, the Fed had also announced that it would be buying back $60 billion a month in Treasury bills. Within a span of six months, the Fed had pumped out a cumulative $9 trillion in loans to Wall Street’s trading houses, according to its own spread sheets, with no peep as to which Wall Street firms were getting the bulk of that money. It’s more than a year later and the … Continue reading →