Search Results for: Federal Reserve

By Pam Martens and Russ Martens: December 27, 2021 ~ Maxine Waters is the Chair of the House Financial Services Committee. That Committee oversees the nation’s banks, including the megabanks on Wall Street that are serially charged by prosecutors with ever creative ways of looting the public. Waters’ Committee also oversees the bank regulators, which are frequently “captured” by Wall Street. One of those bank regulators has now come into the cross hairs of Waters. Typically, if one is a captured bank regulator, one goes to extreme lengths to hide that fact. Thus, it is unusual that the Chair of the Federal Deposit Insurance Corporation (FDIC), Jelena McWilliams (a Trump holdover), has decided she has the power to run the federal agency with an iron hand and overturn the will of her Board of Directors. Even more unusual, McWilliams is engaging in this battle with her Board in public. We’ve seen … Continue reading →

By Pam Martens and Russ Martens: December 24, 2021 ~ The Dallas Fed has not publicly announced the retirement or dismissal of its General Counsel, Sharon Sweeney. And yet, it is currently running a help-wanted ad to replace her. Sweeney is still listed as General Counsel on the Dallas Fed’s website. We placed a call to the bank’s media contact this morning to clarify the details and left a message. We’ll update this article if we receive further information. Sweeney has been with the Dallas Fed for the past 36 years. She doubles as the Dallas Fed’s Ethics Officer and put her signature to former Dallas Fed President Robert Kaplan’s outrageous financial disclosure forms, year after year. Those forms indicated that Kaplan was trading in and out of S&P 500 futures contracts in “over $1 million” trades – even in 2020 when he sat as a voting member of the Fed’s … Continue reading →

By Pam Martens and Russ Martens: December 21, 2021 ~ Last Friday, with the public’s attention diverted to the surge in Omicron variant cases of COVID in the U.S. and holiday travelers’ attention focused on the safety of air travel and family gatherings, the Federal Reserve Bank of New York quietly announced, in a one sentence statement, that it was adding the following three federally-insured banks to its list of counterparties for its newly-minted $500 billion Standing Repo Facility: Citibank, Goldman Sachs Bank USA, and the New York Branch of Mizuho Bank. If you’re stunned that Goldman Sachs is allowed to own a federally-insured bank under existing U.S. law, see our previous report: Goldman Sachs’ Rich Man’s Bank Backstopped by You and Me. If you’re stunned that a New York branch of Mizuho Bank, part of the Japanese conglomerate Mizuho Financial Group, is able to have federal deposit insurance backstopped by … Continue reading →

By Pam Martens and Russ Martens: December 13, 2021 ~ For years now, Wall Street On Parade has been reporting on the probing letters that Senator Elizabeth Warren (D-MA) has sent to Wall Street firms and their regulators in an effort to ferret out the details of systemic corruption and the looting of the American people. (See “Related Articles” below.) Throughout this letter writing campaign, Senator Elizabeth Warren has been a member of the powerful Senate Banking Committee – which has subpoena power. The new Chair of that Committee, Senator Sherrod Brown (D-OH), is also a progressive, like Warren. So why isn’t the Senate Banking Committee using its subpoena power instead of leaving Warren with nothing more than an inquiring mind and a pile of Word documents? According to the Congressional Research Service, the Senate Banking Committee has adopted a rule that requires a majority vote to issue a subpoena for … Continue reading →

By Pam Martens and Russ Martens: December 10, 2021 ~ On May 26 business media reported that the U.S. Department of Justice had opened a probe into the March collapse of the Archegos family office hedge fund. Archegos is believed to have leveraged $20 billion of its own capital into more than $100 billion in stocks and derivative exposure through margin loans tricked up as derivatives by some of the largest banks on Wall Street. One of the laws that the banks may have fallen afoul of is the Fed’s Regulation T. Under Reg T, broker dealers on Wall Street could not have loaned Archegos more than 50 percent to make its stock purchases. To get around this, the banks did not open a margin account for Archegos. Instead, the banks structured derivative contracts where they loaned as much as 85 percent of the money to Archegos to make the trades … Continue reading →

By Pam Martens and Russ Martens: December 9, 2021 ~ On October 12, Wall Street On Parade filed a Freedom of Information Act (FOIA) request with the Federal Reserve Board of Governors seeking the specific dates on which former Dallas Fed President, Robert Kaplan, had made purchases and sales in S&P 500 futures contracts in 2020. According to Kaplan’s financial disclosure forms, he had made “multiple” transactions of over $1 million in S&P 500 futures during 2020, the year that he sat as a voting member of the Federal Open Market Committee and was privy to the Fed’s unprecedented interventions in the market during the economic upheaval from the pandemic. (See Kaplan’s financial disclosure forms from 2015 through 2020 here.) Kaplan was under very precise instructions on his annual financial disclosure form to provide the “month, day, year” of each of his purchases of securities and each of his sales. But … Continue reading →

By Pam Martens and Russ Martens: December 8, 2021 ~ Yesterday, Cornell Law Professor, Saule Omarova, withdrew from her nomination to become the head of the Office of the Comptroller of the Currency (OCC), the regulator of national banks. Emily Flitter, reporting for the New York Times, said it was because Omarova had been “painted as a communist.” In terms of the full story on why Omarova had to withdraw, that is like pointing to a single droplet of rain as the cause of a hurricane. In October, the Vanderbilt Law Review published a 69-page paper by Omarova in which she made the following bizarre recommendations to reform the U.S. banking system: (1) Move all commercial bank deposits from commercial banks to so-called FedAccounts at the Federal Reserve; (2) Allow the Fed, in “extreme and rare circumstances, when the Fed is unable to control inflation by raising interest rates,” to confiscate deposits … Continue reading →

By Pam Martens and Russ Martens: December 7, 2021 ~ Last Friday, December 3, 2021, the Nasdaq stock market recorded 12 stocks setting new 52-week highs in contrast to 585 stocks setting new 52-week lows. Let that sink in for a moment. There were 48.75 times more stocks setting new 52-week lows than were reaching new 52-week highs. That extremely negative reading of market breadth came on a day when the Nasdaq closed down just 1.9 percent. Imagine what the breadth would have looked like if the percentage decline on the overall market had been worse. Yesterday, Monday, December 6, with the Nasdaq closing up 139.6 points, the new 52-week lows still swamped highs, with 137 new lows and only 53 new highs. Unfortunately, Americans never see headlines in their newspapers about the deterioration in the stock market’s underpinnings. What they do see on a regular basis are headlines about the … Continue reading →

By Pam Martens and Russ Martens: December 3, 2021 ~ Progressives are waiting with bated breath to see if President Joe Biden will show more moxie than former President Barack Obama when it comes to Wall Street regulation. So far, the record has been nothing short of bizarre. See here and here. When it came to Wall Street, Obama was all talk and no show. One gift to Wall Street that has been all but forgotten by progressives is that Obama was mandated under Section 1108 of the Dodd-Frank financial reform legislation of 2010 to appoint the very first Vice Chairman for Supervision of banks at the Federal Reserve. Instead, Obama served out his two terms as President without ever filling that mandated post. It was not until the Presidency of Donald Trump in 2017 – seven years after the passage of Dodd-Frank – that Randal Quarles was appointed the very … Continue reading →

By Pam Martens and Russ Martens: December 1, 2021 ~ Fed Chair Jerome Powell along with Treasury Secretary Janet Yellen appeared before the Senate Banking Committee yesterday to deliver their semi-annual reports. Approximately 34 minutes into the hearing, in response to a question from Senator Pat Toomey, Republican from Pennsylvania, Powell announced that he was retiring the word “transitory” to describe the inflationary forces that have a grip on prices in the U.S. The stock market interpreted this to mean that Powell, who just eight days prior had become Democrat President Joe Biden’s nominee for another four years at the helm of the Fed, was now pivoting to cater to Republican inflation hawks in order to win their votes at his upcoming confirmation hearing. The Dow Jones Industrial Average quickly did a bungee dive of 402 points. About 90 minutes into the hearing, the stock market went into a new wave … Continue reading →