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By Pam Martens and Russ Martens: October 23, 2017 Over the past month, with little media attention, both Citigroup and Merrill Lynch have received fines from regulatory bodies for failure to properly report their trading in derivatives – an opaque trading arena that played a significant role in bringing down both firms during the financial crisis. As reported by the Government Accountability Office (GAO) in 2011, Citigroup received $2.5 trillion in cumulative, secret low cost loans from the Federal Reserve during the 2007-2010 financial crisis while Merrill received $1.9 trillion. These loans, many at almost zero interest rates, were made without the authorization or awareness of Congress. (See GAO chart below.) The loans to the two firms were on top of the publicly disclosed and Congress-approved TARP bailout funds. Significant portions of the money loaned to Citigroup and Merrill Lynch were authorized by the Federal Reserve to be funneled to the … Continue reading →

By Pam Martens and Russ Martens: October 18, 2017 America has now been through various iterations of “it’s time to stop bashing Wall Street” by writers who seem to easily get air time or plenty of print space to make their case. An OpEd in the New York Times today is the latest in this endless series. We’ll get to that column shortly, but first some necessary background. Wall Street did not accidentally run a barge aground and leave a small oil slick on the Hudson River. Wall Street did not accidentally release tainted lettuce that sickened a few dozen people. What Wall Street did was intentional and criminal: it financially engineered a toxic subprime house of cards which it knew from its own internal reviews was going to collapse; it then molded the toxic product into inscrutable bundles; it sold the bundles to unsuspecting investors around the globe while … Continue reading →

By Pam Martens and Russ Martens: May 1, 2017 Back in 2014 New York Times columnist Paul Krugman embarked on a mission to defend President Obama’s reform of Wall Street’s biggest banks that had brought the country to the brink of financial collapse just six years earlier. In August of 2014 Krugman wrote that the Dodd-Frank financial reform legislation that Obama had signed into law in 2010 “is a success story.” Krugman’s rubber stamp of Dodd-Frank came despite the fact that JPMorgan Chase, the country’s largest bank, had just two years earlier – long after the passage of Dodd-Frank – used hundreds of billions of dollars of its depositors’ money in its commercial bank, Chase, to make wild gambles in derivatives in London, losing at least $6.2 billion along the way. This so-called “London Whale” debacle correctly convinced millions of Americans that the only way to truly reform Wall Street … Continue reading →

By Pam Martens and Russ Martens: March 15, 2017 Following the Wall Street crash of 1929, thousands of banks failed in the United States. More than 3,000 banks went under in 1931 followed by more than 1400 the following year. There was no Federal insurance on bank deposits in those days so both depositors and shareholders were wiped out or received pennies on the dollar when the banks went bust. This deepened the panic and deepened the Great Depression. Many of the bank failures stemmed from the banks using depositors’ money to speculate in the stock market, sometimes to manipulate the price of their own stock. Franklin Delano Roosevelt was sworn in as President of the United States on March 4, 1933. Two days later he declared a national banking holiday, meaning that he closed all the banks and sent in the examiners to determine which ones were sound and … Continue reading →

By Pam Martens and Russ Martens: January 18, 2017 Sometimes all it takes to win a war is a rallying cry. That cry started in the bowels of Wall Street on September 17, 2011 with the takeover of Zuccotti Park by grassroots protesters calling themselves Occupy Wall Street. The thunder clap from that movement, “we are the 99 percent,” reverberated around the world. Occupy focused the public’s attention on the insidious wealth transfer system that has been institutionalized by Wall Street on behalf of the 1 percent – a system which has minted dozens of billionaires and thousands of multi-millionaires while collapsing the U.S. economy from 2008 to 2010 and leaving millions of Americans homeless and jobless. (See our past coverage of Occupy in related articles below.) Yesterday, green shoots from the Occupy movement sprouted in a light falling rain outside the headquarters of Goldman Sachs at 200 West Street … Continue reading →

By Pam Martens and Russ Martens: November 4, 2016 A few years back, when William D. Cohan was writing for Bloomberg News, one could reliably count on him to hold Wall Street’s feet to the fire. Now Cohan is writing for the New York Times and it feels like the Times sent him for an in-house lobotomy or at least a crash course in reoriented thinking. Consider Cohan’s article from yesterday in the Times, titled Why Washington Needs Wall Street. First Cohan piles on to the recent bashing of Senator Elizabeth Warren by Roger Lowenstein in the pages of the Times. Warren has led a meaningful, multi-year charge to expose the failed reforms and lapdog regulators overseeing Wall Street, which is hands-down the most corrupt industry in America and located in the same home town as the New York Times.  (If you can’t clean up your own home town, what … Continue reading →