Search Results for: Federal Reserve

By Pam Martens and Russ Martens: September 22, 2021 ~ Federal Reserve Chairman Jerome Powell took a few wonky questions from various reporters at his press conference today and then Jeanna Smialek, Federal Reserve and Economy reporter for the New York Times, was called on. Smialek was the first reporter to lead the elephant in the room out into the open. The exchange went as follows: Smialek: “Prior to recent media reports, were you aware of the kind of security buying and selling that [Dallas Fed and Boston Fed] Presidents Kaplan and Rosengren were participating in last year? And I wonder if you thought those were appropriate?” Powell: “So, no I was not aware of the specifics of what they were doing. So let me just say a couple of things about this subject. We understand very well that the trust of the American people is essential for us to effectively … Continue reading →

By Pam Martens and Russ Martens: September 22, 2021 ~ Michael Derby of the Wall Street Journal broke the story on September 7 that Dallas Fed President Robert Kaplan was trading in and out of millions of dollars of individual stock positions in 2020. Last year was a year of unprecedented crisis when Kaplan was a voting member of the Federal Open Market Committee (FOMC) and had access throughout the year to non-public, market-moving information. On September 18, Wall Street On Parade reported that Kaplan was not just trading individual stocks but was, astonishingly, also trading S&P 500 futures contracts in transactions of more than $1 million in 2020. The most popular and liquid S&P 500 futures contract is the E-mini, which can provide a trader with as much as 95 percent leverage. The stock exchanges are only open in the U.S. from 9:30 a.m. to 4 p.m. (EDT) weekdays, but … Continue reading →

By Pam Martens and Russ Martens: September 21, 2021 ~ Fortunately for Americans, the keen-eyed Wall Street watchdog group, Better Markets, is not living in the same alternative reality universe as the cable financial news network, CNBC. Last Friday, CNBC published a crazy headline regarding Dallas Fed President Robert Kaplan trading tens of millions of dollars of individual stocks and S&P 500 futures in 2020 while Boston Fed President Eric Rosengren traded in and out of REITs (Real Estate Investment Trusts). The trading occurred despite both men being privy to non-public, market moving information coming from the Federal Reserve, the central bank of the United States. CNBC’s headline read: “After years of being ‘squeaky clean,’ the Federal Reserve is surrounded by controversy.” CNBC was royally roasted on Twitter for its “squeaky clean” fairy tale. CNBC’s flight from reality comes after the Fed’s former Chair, Janet Yellen, went straight from her position at … Continue reading →

By Pam Martens and Russ Martens: September 20, 2021 ~ Fed watchers are stunned that Fed Chair Jerome Powell thinks it is appropriate for the Fed to investigate itself following one of the most arrogant and brazen trading scandals in the history of the Fed. The focal point of that scandal is Robert S. Kaplan, the President of the Dallas Fed, who held non-public, market moving information throughout last year but nonetheless traded in and out of tens of millions of dollars of individual stocks as well as – wait for it – S&P 500 futures, an instrument used by speculators to make highly leveraged, directional bets on the market. S&P 500 futures extend the trading day to almost 24/7 from Sunday evening to Friday night. The type of trading done by Kaplan appears to be expressly prohibited by the Code of Conduct of the Dallas Fed. Appendix A on “Disqualifying … Continue reading →

By Pam Martens and Russ Martens: September 18, 2021 ~ A transaction that has been missed by major news outlets on the financial disclosure form for Dallas Fed President, Robert Kaplan, is a line item showing that Kaplan made “multiple” trades of more than $1 million in S&P 500 futures. This is a stunning revelation for a multitude of reasons. First, Kaplan’s financial disclosure form shows that he already had exposure to the S&P 500 through more than $1 million in an S&P 500 Exchange Traded Fund (ETF), which trades during regular stock market hours. Using S&P 500 futures gave Kaplan access to making directional bets on where the market would go after the stock market closed, which is typically when the Fed makes market-moving announcements. The most popular and liquid S&P 500 futures contract is the E-mini S&P 500. A person can get as much as 95 percent leverage on … Continue reading →

By Pam Martens and Russ Martens: September 16, 2021 ~ During the financial collapse of 2008, money market funds found themselves holding toxic paper that no one wanted to buy. In order to stop panic runs on money market funds, on September 19, 2008 the U.S. Treasury Department issued a statement indicating it would guarantee more than $3.5 trillion in money market funds. As COVID-19 concerns took root in March of last year and the stock market plunged, the Fed launched another bailout program for money market funds on March 18, 2020. The program was called the Money Market Mutual Fund Liquidity Facility (MMLF) and was run out of the Federal Reserve Bank of Boston. Going forward, the Fed does not want to be in the position of having to bail out more privately owned money market funds. So the Fed has been seducing money market funds and other financial institutions … Continue reading →

By Pam Martens and Russ Martens: September 15, 2021 ~ Last Tuesday, Mike Derby reported at the Wall Street Journal that the President of the Dallas Fed, Robert Kaplan, had “made multiple million-dollar-plus stock trades in 2020, according to a financial disclosure form provided by his bank.” The individual stocks included shares of Apple, Alphabet (Google), Alibaba,  Amazon, Chevron, Delta Airlines, Facebook, General Electric, Johnson and Johnson, Oracle, Tesla and numerous others. Kaplan previously spent more than two decades at Goldman Sachs, one of the largest trading houses on Wall Street, and, apparently, he thinks he still works there. Think about this for a moment. While Fed Chair Jerome Powell is repeatedly testifying to Congress last year that its every monetary move during the pandemic was on behalf of the average American, the Dallas Fed President is making million-dollar bets on big tech stocks the Justice Department is investigating for anti-trust … Continue reading →

By Pam Martens and Russ Martens: September 13, 2021 ~ Most Americans believe that the unprecedented Fed bailouts of Wall Street didn’t begin until December of 2007, on the cusp of Wall Street’s financial collapse in 2008. That’s wrong. The Fed’s first massive bailout of Wall Street started on 9/11. By the closing bell on September 10, 2001, the day before the attacks, the Nasdaq stock market was already in the midst of a full-scale implosion, having lost 66 percent of its market value and wiping out $4 trillion of wealth. The Wall Street mega banks were in the cross-hairs at the time of then New York State Attorney General Eliot Spitzer for bringing to market Initial Public Offerings of companies that the banks’ own research analysts were internally calling “crap” and “dogs” while the same banks issued buy recommendations on the “dogs” to the unknowing public. One internal email from … Continue reading →

By Pam Martens and Russ Martens: September 9, 2021 ~ The highly respected and closely watched Atlanta Fed’s GDPNow forecast for the third quarter has been slashed by 41 percent since August 2 – from 6.3 percent GDP growth to a tepid 3.7 percent projected GDP growth on September 2. The next update to its forecast will occur tomorrow after the Producer Price Index (PPI) is released at 10 a.m. (The GDPNow update typically occurs within a few hours of a new data release.) The Atlanta Fed’s GDPNow model is the seasonally adjusted annual rate. It comes with the following caveat: “GDPNow is not an official forecast of the Atlanta Fed. Rather, it is best viewed as a running estimate of real GDP growth based on available economic data for the current measured quarter. There are no subjective adjustments made to GDPNow – the estimate is based solely on the mathematical results … Continue reading →

By Pam Martens and Russ Martens: September 2, 2021 ~ Jim Himes, a Democrat from Connecticut, chairs the House Financial Services Committee’s Subcommittee on National Security, International Development and Monetary Policy. That Subcommittee has just announced a hearing slated for September 23 at 10:00 a.m. titled: “Lending in a Crisis: Reviewing the Federal Reserve’s Emergency Lending Powers During the Pandemic and Examining Proposals to Address Future Economic Crises.” The list of witnesses for this hearing has not yet been announced. There’s good reason for every American to be nervous about the real agenda of this hearing. For starters, Jim Himes is a 12-year veteran of Goldman Sachs. Second, he lives in Greenwich, Connecticut – the tony enclave of hedge fund billionaires. In addition, six of his top 10 donors over his career in Congress are the mega banks on Wall Street. (See chart below.) There is also the fact that Himes … Continue reading →