By Pam Martens and Russ Martens: October 13, 2022 ~ When something happens for the first time in history at federally-insured banks, Congress and federal regulators need to pull their heads out of the sand and pay attention. We’re talking about the fact that in the second quarter of this year, trading revenues at federally-insured commercial banks eclipsed the trading revenues at bank holding companies – which typically include subsidiaries where traders actually have licenses to trade. This latest data on what is happening inside the nation’s largest federally-insured banks comes from the Office of the Comptroller of the Currency (OCC), see pages 2 and 3 here. The federally-insured banks generated a total of $10.3 billion in trading revenue in the second quarter versus $10.2 billion for the bank holding companies, or 101 percent of the bank holding company revenues. That’s never happened before according to the data provided by the … Continue reading →

By Pam Martens and Russ Martens: October 12, 2022 ~ The last thing that a stockbroker on Wall Street wants to have on his BrokerCheck record is a “Disclosure” item. BrokerCheck is the database maintained by Wall Street’s self-regulator, FINRA, which allows the public to peruse the past history of someone they might be considering doing investment business with on Wall Street. A “Disclosure” item means that a complaint has been brought against you and it describes the nature of the complaint and the status. In our more than three decades of using BrokerCheck, we have never seen a broker still employed with any major Wall Street firm who has listed even one criminal charge, let alone four – until we looked up the BrokerCheck Record for the Chairman and CEO of JPMorgan Chase, Jamie Dimon. Under his individual record, Dimon has listed two pending civil cases, four criminal cases, and … Continue reading →

By Pam Martens and Russ Martens: October 11, 2022 ~ Wall Street veteran Nomi Prins’ new book is being released today with a title that should give every member of the Senate Banking and House Financial Services Committees pause: Permanent Distortion: How the Financial Markets Abandoned the Real Economy Forever. The book does what neither of these Committees has done for the American people. It explains how the financial crash of 2008 unleashed an unbridled and unaccountable Fed as Wall Street’s permanent sugar daddy, distorting market functioning with its perpetual money spigot to the point that markets no longer function as a pricing mechanism or efficient allocator of capital but more along the lines of a Ponzi scheme for the rich. Prins writes: “Once central banks unleashed monetary policy to accommodate mega-banks, subsidize Wall Street financiers, and bolster global markets, the very idea of free and open markets and laissez-faire investing … Continue reading →

By Pam Martens and Russ Martens: October 10, 2022 ~ At Fed Chairman Jerome Powell’s last press conference on September 21 he said that there is “good reason to think that this will continue to be a reasonably strong economy.” Unfortunately, the U.S. can’t have a strong economy without strong banks willing and able to lend. And there are serious storm fronts in that area that the Fed Chair and mainstream media are choosing to ignore. Last week multiple news outlets raised the question as to whether the troubles at Credit Suisse signaled another “Lehman moment.” (See here, here, and here, for example.) A “Lehman moment” refers to the former 158-year old Wall Street investment bank, Lehman Brothers, collapsing into bankruptcy on September 15, 2008 during a widening financial crisis on Wall Street. Because Lehman was the only major Wall Street firm that the Fed allowed to collapse into bankruptcy (rather … Continue reading →

By Pam Martens and Russ Martens: October 7, 2022 ~ Nomura Holdings is tiny compared to the mega banks on Wall Street. According to its website, it had just $384 billion in assets as of March 31, 2021. On the same date, JPMorgan Chase had $3.2 trillion in assets. But for reasons that neither the Federal Reserve nor Congress have yet to explain, a unit of Nomura was allowed to borrow trillions of dollars in emergency repo loans from the Fed beginning on September 17, 2019 – months before there was any COVID crisis anywhere in the world. The chart above shows that in the last three months of 2019, Nomura borrowed $3.7 trillion cumulatively under the Fed’s emergency repo loan program, topping the amount borrowed by JPMorgan Chase by $1.11 trillion. The loan amounts come directly from the emergency repo loan data being released quarterly by the New York Fed, … Continue reading →

By Pam Martens and Russ Martens: October 6, 2022 ~ Last Thursday, while news outlets focused on videos of the devastating impact of Hurricane Ian on the southwest coast of Florida, two researchers at the Office of Financial Research published a breathtaking and almost surreal analysis of how the mega banks on Wall Street are once again doubling down on unprecedented risk with derivatives and threatening the financial stability of the U.S. The report was ignored by mainstream business media. The Office of Financial Research was created under the Dodd-Frank financial reform legislation of 2010 to make sure that Wall Street mega banks could never again ravage the economy and financial system of the United States — as they did in 2008 – by engaging in reckless derivative trades and toxic bets. OFR describes its mission as follows: “Our job is to shine a light in the dark corners of the … Continue reading →

By Pam Martens and Russ Martens: October 5, 2022 ~ If a major fire occurs in most cities and towns across America, there is a standing procedure to quickly call for mutual aid from other fire departments to achieve a speedy and safe resolution. But when it comes to the Lee County Electric Cooperative (LCEC) that provides electricity to the city of Cape Coral, Florida, something has gone terribly wrong in the process of calling for that mutual aid in a timely manner after one of the most devastating hurricanes in Cape Coral’s history. Cape Coral is a city of 204,000 residents according to the U.S. Census Bureau. LCEC has been providing electric power to Cape Coral since its first six model homes were constructed in 1958 – a span of 64 years. But for days after Hurricane Ian hit the Southwest coast of Florida on Wednesday, September 28, as a … Continue reading →

By Pam Martens and Russ Martens: October 4, 2022 ~ At 6:53 a.m. this morning (ET), Dow futures were up 454 points. That followed the Dow Jones Industrial Average gaining 765 points yesterday. No one who has been a trader on Wall Street or a stock broker for multiple decades believes this rally is real. Wall Street veterans are thinking that either the Fed’s plunge protection team or the Treasury’s plunge protection team is behind the rally. Equally unbelievable, as the chart above indicates, is the fact that the major mega banks on Wall Street closed in the green yesterday. Many of these are counterparties to Credit Suisse derivatives and thus subject to the potential for contagion. Until everyone who works on Wall Street is 25 years old and too young to remember what happened in 2008 after Citigroup began to quake, Wall Street traders are not going to believe that … Continue reading →

By Pam Martens and Russ Martens: October 3, 2022 ~ The Swiss global bank, Credit Suisse, which is a derivatives counterparty to major Wall Street banks and U.S. insurers, raised alarm bells in markets on Friday and is raising more anxiety this morning. Its 5-year credit default swap (CDS), a measurement of its risk of defaulting on its debt, jumped to 250 basis points on Friday and traded as high as 350 basis points in early morning trade today. The big move in the CDS on Credit Suisse is further impacting the price of its common stock. The shares closed on Friday in New York at $3.92, just pennies away from its all-time low, then dropped another 11 percent in early morning trading in Europe today. When a major derivatives counterparty begins to see a blowout in its credit default swaps, that impacts the stock prices of all major Wall Street … Continue reading →

By Pam Martens and Russ Martens: September 30, 2022 ~ Yesterday, Senator Robert (Bob) Casey, Jr. (D-PA) and Senator John Cornyn (R-TX) testified before the Senate Banking Committee. At a time when there is little that the two political parties can agree on in Congress, it was refreshing to hear these two Senators from different parties earnestly explain the threat that China’s ambitious agenda poses to the U.S.; how outward investment by U.S. corporations is furthering China’s agenda; and outline legislation to deal with the threat. Senator Casey explained the problem as follows: “For decades, the United States has steadily ceded its manufacturing power to other countries, particularly foreign adversaries, like the Chinese Communist Party (CCP) and the Russian Federation. Outsourcing our manufacturing and supply chains has put our economic and national security at risk. Unfortunately, the pandemic exacerbated this problem, as we experienced acute shortages of things like PPE and … Continue reading →