Search Results for: Federal Reserve

By Pam Martens and Russ Martens: June 18, 2021 ~ How embarrassing it must be for Jerome Powell, Chairman of the Federal Reserve, that three of the largest banks in the U.S. that are supervised by the Fed, have been deemed not trustworthy enough by the European Commission that they were banned from participating in this week’s historic European Union bond offering. It is also egg on the face of the U.S. Department of Justice, which has been handing out deferred prosecution agreements to these same banks for felony counts like it’s a meter maid doling out parking tickets. JPMorgan Chase, Citigroup and Bank of America were banned along with seven non-U.S. banks from participating in this week’s European Union bond offering. The syndicated offering is part of what will grow over the next five years to be a $969 billion COVID-19 recovery fund for the European Union, part of the plan … Continue reading →

By Pam Martens and Russ Martens: June 17, 2021 ~ Wells Fargo bank analyst Mike Mayo appeared on CNBC this morning to paint a rosy picture for how banks would be treating the Fed’s less than dovish statement yesterday. Mayo said this about the banks: “Back in the 70s or even 1994 the inflation caused unrealized securities losses, derivatives losses, asset/liabilities mismatches. So too much inflation is hell for banks. But we think what’s happening now is a dose of heaven. And so higher rates sooner can allow banks to finally earn more money on all those deposits that they’ve gathered. And so this means that assets reprice faster than their liabilities.” What actually priced much faster than either assets or liabilities were the share prices of the mega banks on Wall Street. The cheery words had barely left Mayo’s tongue before the biggest banks on Wall Street went into a … Continue reading →

By Pam Martens and Russ Martens: June 17, 2021 ~ On May 26 Bloomberg News reported that the U.S. Department of Justice had opened an investigation into Archegos Capital Management and its bank lenders. Archegos is the family office hedge fund that had blown up in late March, causing a total of more than $10 billion in losses to mega banks including Credit Suisse, UBS, Morgan Stanley and others. Archegos had obtained leverage of as much as 85 percent on its heavily-concentrated stock trades from some of its banks, in brazen violation of the Federal Reserve’s Regulation T which sets margin for stock trading at a maximum of 50 percent on opening trades. In addition, the banks were holding the stocks in their own names (while shifting losses and gains to Archegos under a derivatives contract called a swap) thus denying the public the knowledge of the true owners of these … Continue reading →

By Pam Martens and Russ Martens: June 16, 2021 ~ Corporate media outlets like Bloomberg News, the CBS news program 60 Minutes, and CNBC have been seduced into obsequious behavior when it comes to Jamie Dimon, the Chairman and CEO of JPMorgan Chase, despite the fact that Dimon has presided over the most unparalleled crime spree in the history of U.S. banking. Between 2014 and September of last year, JPMorgan Chase has been charged with five criminal felony counts by the U.S. Department of Justice. The bank admitted to all five counts. (See the bank’s detailed rap sheet here.) Despite this crime spree and endless probation periods followed by more crime, Dimon has further seduced federal bank regulators into allowing his unrepentant behemoth to become the most systemically risky bank in America. That assessment is not our opinion. It is the assessment of the federal government based on hard data. The … Continue reading →

By Pam Martens and Russ Martens: June 15, 2021 ~ Jeff Bezos, the founder and man at the helm of Amazon for the past 27 years, announced last month that he will be stepping down as CEO on July 5. Fifteen days later, according to Bezos, he and his brother Mark will take off on the first crewed space flight from his rocket company, Blue Origin. (Another seat on the flight has been auctioned online for $28 million. The winner has not yet been named.) Following on the heels of Bezos’ 2019 announcement of his divorce to his wife of a quarter of a century, MacKenzie Bezos, and tabloid headlines over his accusations of attempted extortion and blackmail by the National Inquirer over Bezos salacious texts to his girlfriend, shareholders were likely becoming eager for Bezos to hop aboard that spacecraft. What shareholders were apparently not thinking about was what was going … Continue reading →

By Pam Martens and Russ Martens: June 11, 2021 ~ Senator Elizabeth Warren of Massachusetts chairs the Senate Banking Committee’s Subcommittee on Economic Policy. On Wednesday the Subcommittee held a hearing on a topic that is becoming ever more timely with each new Bitcoin extortion attack on an essential U.S. business. The hearing was titled: “Building A Stronger Financial System: Opportunities of a Central Bank Digital Currency.” To set the stage for the need for a regulated alternative to the crime network now trafficking in cryptocurrencies, Warren explained all the ways that cryptocurrencies are simply “lousy” for any socially-redeeming purpose. Warren stated: “Cryptocurrencies have turned out to be a fourth-rate alternative to real currency. First, cryptocurrencies are a lousy way to buy and sell things. Unlike the dollar, their value fluctuates wildly depending on the whims of speculative day traders. You know, in just the last two months, the value of … Continue reading →

By Pam Martens and Russ Martens: June 7, 2021 ~ Janet Yellen, the current U.S. Treasury Secretary, is also the Chair of the Financial Stability Oversight Council, which includes every Wall Street regulator. Before coming to the Treasury Department, Yellen was the Chair of the Federal Reserve and had spent the bulk of her working career at the Fed or the San Francisco Fed. When Yellen was not reappointed as Fed Chair by Donald Trump when her Chairmanship term expired in 2018, she immediately cashed in her chips on Wall Street, collecting millions of dollars in speaking fees in 2019, and undisclosed millions more in 2018. (See Janet Yellen’s Cash Haul of $7 Million Is Just the Tip of the Iceberg; She Failed to Report Her Wall Street Speaking Fees from JPMorgan and Others in 2018.) Yellen was a Federal Reserve Board Governor when she was appointed Fed Chair. Her term … Continue reading →

By Pam Martens and Russ Martens: June 4, 2021 ~ The House Financial Services Subcommittee on Oversight and Investigations, chaired by Congressman Al Green of Texas, will hold a hearing on June 30 titled:  “America on ‘FIRE.’ Will the Crypto Frenzy Lead to Financial Independence and Early Retirement or Financial Ruin?” The announcement of the hearing came yesterday, the same day that Wall Street On Parade reported that the Federal Trade Commission was witnessing a skyrocketing increase in crypto scams. The FTC wrote on May 17: “Reports to the FTC’s Consumer Sentinel suggest scammers are cashing in on the buzz around cryptocurrency and luring people into bogus investment opportunities in record numbers. Since October 2020, reports have skyrocketed, with nearly 7,000 people reporting losses of more than $80 million on these scams.” The Subcommittee has not yet posted its lineup of witnesses for the hearing. Republicans, who are the minority party … Continue reading →

By Pam Martens and Russ Martens: June 2, 2021 ~ The chart above has been compiled by the St. Louis Fed using the New York Fed’s data for its issuance of Reverse Repurchase Agreements, otherwise known as Reverse Repos. What’s a Fed Reverse Repo? According to the New York Fed, it is when counterparties loan the Fed money in exchange for collateral, which is typically Treasury bills. In the most recent action, we’re talking about the New York Fed, acting on behalf of the Federal Reserve, selling U.S. Treasuries to Wall Street banks, trading houses, mutual funds and government-sponsored enterprises in overnight and weekend deals and paying zero or next to zero as an interest rate when it buys back the securities. Why would the smartest guys on Wall Street, who never let a loose dime slip through their fingers in order to get a larger cut of the annual bonus pool, be … Continue reading →

By Pam Martens and Russ Martens: May 27, 2021 ~ Last evening, Bloomberg News, followed by the Wall Street Journal, reported that the U.S. Department of Justice has opened a probe into the late March collapse of the Archegos family office hedge fund. The Wall Street Journal reported that “Banks that lent to Archegos, including Credit Suisse Group AG, UBS Group AG, Goldman Sachs Group Inc. and Morgan Stanley,” had been contacted for information by the Justice Department. According to media reports, Archegos is believed to have leveraged $20 billion of its own capital into more than $100 billion in stock and derivative exposure through margin loans from the banks named above, as well as others. Among the laundry list of items the Justice Department may be investigating, is whether the banks violated the Federal Reserve’s Regulation T, which would have limited the banks to an initial margin loan of no … Continue reading →