Search Results for: stress test

Large Banks Have Bled $921 Billion in Deposits Since April 2022 — the Fastest Pace in 40 Years — and a Much Larger Decline than Small Banks

Deposits at Large Commercial Banks versus Small Banks (Thumbnail)

By Pam Martens and Russ Martens: July 6, 2023 ~ You may recall reading a burst of headlines during the banking crisis in March of this year about depositors fleeing small banks for the perceived comfort of the largest banks. Unfortunately, those headlines were never put in context or updated to reflect a broader picture. In fact, using deposit data that is updated weekly from the Federal Reserve’s own H.8 releases, it becomes crystal clear that the large banks are bleeding deposits at the fastest pace in 40 years. As the Federal Reserve data in the chart above indicates, deposits at the largest 25 commercial banks in the U.S. peaked at $11,679,758,700,000 on April 13, 2022. The most recent H.8 release shows that the deposits of the 25 largest banks as of June 21 stood at $10,758,977,000,000. That’s a percentage decline of 7.88 percent or $920,781,700. The Fed’s H.8 data defines … Continue reading

Sullivan & Cromwell’s Crypto Clients Are in Growing Distress

Andrew (Andy) Dietderich, Law Partner at Sullivan & Cromwell

By Pam Martens and Russ Martens: January 31, 2023 ~ The 144-year old law firm, Sullivan & Cromwell, which previously prided itself on being the go-to law firm for Wall Street, decided a few years back to get deep in the swamp with all things crypto. That dicey decision is now playing out in negative headlines that are dragging down the reputation of the 900-attorney law firm. Adding to questions swirling around its past legal representation of now indicted crypto kingpin, Sam Bankman-Fried, as well as his bankrupt crypto exchange, FTX, and his hedge fund, Alameda Research, is the fact that a growing number of Sullivan & Cromwell’s other crypto clients are also in various stages of distress. Notwithstanding that reality, the presiding judge in the FTX bankruptcy proceedings, John Dorsey, signed an order on January 20 naming Sullivan & Cromwell the lead counsel in the FTX bankruptcy case. But long … Continue reading

BlackRock Stands at the Nexus Between Derivatives Blowing Up in U.K. Pensions and the Shortest Tenure of a Prime Minister in U.K. History

Laurence (Larry) Fink, Chairman and CEO, BlackRock

By Pam Martens and Russ Martens: October 21, 2022 ~ Goodbye Liz Truss. We hardly knew ye. Yesterday, Liz Truss announced she would resign as Prime Minister of the U.K. after just 44 days in office. That’s a new one for the record books in the U.K. In her brief span in office, Truss had managed to create a financial crisis in the sovereign debt market, force a bailout by the Bank of England, trigger alarm bells about the safety of pension plans in the U.K., and fire her Finance Minister.  All of these events are interconnected. Here’s the short version: On September 23 Truss’ Finance Minister (the Chancellor of the Exchequer) Kwasi Kwarteng announced big tax cuts which had to be funded through higher government borrowing because the Truss government had no clear plan for how to pay for them. This was interpreted by debt markets to mean bigger deficits, … Continue reading

California Governor Rattles Stocks: A State with 40 Million Residents Has Just 200 Coronavirus Test Kits from the CDC

Governor Gavin Newsom of California Holds Press Conference on Coronavirus, February 27, 2020

By Pam Martens and Russ Martens: February 27, 2020 ~ The Dow Jones Industrial Average was down by 960 points this morning and then began to stage a strong rally. That rally unraveled on news that came out of the press conference held by California Governor Gavin Newsom. The Governor, a Democrat, seemed to go out of his way to stress that his administration has been working closely with the Trump administration in addressing the coronavirus outbreak. He refused to criticize Trump when questioned by reporters. What did become quite clear, however, as reporters drilled down to the situation on the ground in California, is that the state has taken in 800 repatriated Americans from countries with coronavirus outbreaks, has received thousands more passengers on domestic flights from suspect countries, while it currently has just 200 tests kits from the CDC to test for the virus. Newsom told reporters that … Continue reading

Fed’s Latest Plan for Bailing Out Wall Street Banks: Let Them Overdraft their Accounts at the Fed

Victoria Guida, Reporter for Politico (Thumbnail)

By Pam Martens and Russ Martens: October 31, 2019 ~ Yesterday, following the announcement of another 1/4 point interest rate cut by the Federal Reserve’s Open Market Committee, Fed Chairman Jerome Powell held a press conference at 2:30 p.m. It proved to be an embarrassing and shameful example of New York City-centric business journalism. Seven business journalists from leading business news outlets that cover Wall Street asked questions in the first 23 minutes of the press conference. Not one of these reporters asked about the liquidity crisis on Wall Street that has resulted in the Fed offering $690 billion a week to 23 Wall Street securities firms and one foreign bank as well as a newly launched “don’t call it QE4” operation by the Fed to buy up $60 billion a month in Treasury bills from Wall Street dealers. The Fed began its repo loan interventions on September 17 of … Continue reading

Wall Street’s Latest Plot: Blame the Financial Crash on the French

By Pam Martens and Russ Martens: August 21, 2017 Wall Street appears to have a plan to get the deregulation it wants by pinning the start of the epic financial crash of 2007-2010 on (wait for it) the French, rather than its own unbridled greed, corruption and toxic manufacture of junk bonds known as subprime debt that it paid to have rated AAA by ethically-challenged and deeply conflicted rating agencies. (The same rating agencies that are getting paid by Wall Street to rate its debt issues today.) One of the men helping to peddle this narrative is Steve Hanke, a Senior Fellow at the Cato Institute, a taxpayer-subsidized nonprofit that was secretly owned by the billionaire Koch brothers for decades. Hanke’s bio at Cato lists him as a Professor of Applied Economics at John Hopkins University in Baltimore and provides the following titillating background: “Prof. Hanke served as a State … Continue reading

Neel Kashkari: The Shadow Over Janet Yellen’s Head as She Testifies to Congress

By Pam Martens and Russ Martens: June 21, 2016  At 10 a.m. this morning, Federal Reserve Chair Janet Yellen will take her seat before the U.S. Senate Banking Committee to deliver her semi-annual testimony on monetary policy. She’ll perform the same task tomorrow before what is likely to be a far more hostile House Financial Services Committee, based on the fireworks that were flying in her last testimony there in February. There will be a shadow wafting over Yellen at both hearings. The shadow is being cast by Neel Kashkari, who took the reins as President of the Federal Reserve Bank of Minneapolis this past January and has effectively transferred the debate on too-big-to-fail banks from the hands of Yellen to his own regional institution. Kashkari has been conducting symposiums and delivering speeches on the issue and has promised a formalized plan to deal with the problem by the end … Continue reading

Interconnected Banks Pose Greatest Threat to U.S. Financial System

By Pam Martens and Russ Martens: February 17, 2015 Last Thursday, the Office of Financial Research (OFR), part of the Federal boondoggle created under the Dodd-Frank financial reform legislation in 2010 to foster the illusion that the government was reining in risk on Wall Street, released a new study showing almost unfathomable levels of systemic and interconnected risk among the too-big-to-fail banks that cratered the U.S. financial system in 2008 and has left our economy still struggling to right itself. Authored by Meraj Allahrakha, Paul Glasserman, and H. Peyton Young, the report reconfirms to Americans that nothing significant has been accomplished in the last six years to prevent casino capitalism on Wall Street from crashing our financial system and the U.S. economy again. The report found that five U.S. banks had high contagion index values — Citigroup, JPMorgan, Morgan Stanley, Bank of America, and Goldman Sachs. The authors write: “…the … Continue reading

Full Text of Fed Chair Janet Yellen’s Testimony Today Before House Financial Services Committee

By Pam Martens: February 11, 2014 Janet Yellen, the newly installed Chair of the Federal Reserve Board of Governors, will face her first Congressional grilling as Fed Chair today before the House Financial Services Committee. That Committee is chaired by Jeb Hensarling, a staunch conservative, who has turned the web site for the Committee into a billboard for self promotion and the Koch Party platform for small government, deregulation, and partisan attacks. Below is the written testimony that Yellen will deliver this morning at 10:00 a.m. before the Committee. ————- Chair Janet L. Yellen, Semiannual Monetary Policy Report to the Congress Before the Committee on Financial Services, U.S. House of Representatives, Washington, D.C. February 11, 2014 Chairman Hensarling, Ranking Member Waters and other members of the Committee, I am pleased to present the Federal Reserve’s semiannual Monetary Policy Report to the Congress. In my remarks today, I will discuss the current … Continue reading

Citigroup’s Latest Brainchild: CitiFirst

By Pam Martens: August 28, 2012  When Ron Suskind’s new book, “Confidence Men,” was released last Fall, there was much noise about the jaw-dropping revelation that President Obama told Treasury Secretary Tim Geithner to “wind down” Citigroup and Geithner brazenly disobeyed the President, essentially doing his own thing where Citigroup was concerned.  Here’s a snippet: “In early April, Obama’s economic team congregated in the Oval office for the morning briefing.  All the key players were there, except Geithner.  After a few moments, the president talked about a resolution plan for Citigroup as a key item in his arsenal, and wondered how close it was to completion.  Christina Romer and Larry Summers glanced at each other.  They had been talking for nearly a month about how the Treasury Department seemed to be ignoring the president’s clear, unequivocal orders involving Citigroup. Geithner and his team were moving forward with their own favored … Continue reading