By Pam Martens and Russ Martens: June 17, 2022 ~ Crypto pushers hired themselves Trump’s outgoing SEC Chairman, Jay Clayton; a boatload of celebrities like Matt Damon (see his commercial below), LeBron James, Spike Lee, Tom Brady, Alec Baldwin, among numerous others; and high-priced lobbyists to sway Congress and state legislatures to back off any regulatory push. Crypto even slapped its name on sports stadiums and arenas – similar to Enron and Citigroup just before they blew up from specious business models. Like any other pump and dump scheme, crypto mania worked for a while. Insiders grabbed their windfall profits early and left the unsophisticated with the losses. Now crypto concerns are hiring themselves the likes of Big Law firm Akin Gump to explain why investors can’t get access to $11 billion in frozen accounts at Celsius Network. The warnings have been out there for years now from experts in the … Continue reading →

By Pam Martens and Russ Martens: June 15, 2022 ~ Wall Street does not have exclusivity on the pain trade. There’s pain at the pump for average Americans, pain at the grocery store, and now, adding to the pain for American home buyers who have watched the cost of homes spiral upward over the past year, the national average on the 30-year fixed rate mortgage just spiked to 6.28 percent as of yesterday. Mortgage News Daily reported the following yesterday: “The average lender is quoting top tier 30yr fixed rates in the 6.25-6.375% range, but as we discussed yesterday, it’s cheaper than normal to buy one’s rate down. That means rates in the high 5’s are still being quoted, but those quotes imply higher upfront costs (aka ‘points’).” Interest rates on the 5-year and 10-year U.S. Treasury notes are also rising at a breathtaking pace – effectively doing much of the … Continue reading →

By Pam Martens and Russ Martens: June 14, 2022 ~ It wasn’t just cryptocurrencies that crashed yesterday, it was crypto exchanges, crypto mining stocks, publicly-traded companies holding large investments in crypto, and crypto ETFs. By the time the closing bell rang yesterday, ProShares Bitcoin Strategy ETF had tanked by 20.22 percent on the day, bringing its year-to-date loss to 50.4 percent. Other crypto-related ETFs were similarly hammered. VanEck Bitcoin Strategy ETF gave up 19.86 percent, bringing its year-to-date loss to 53 percent. Shares of crypto mining stocks, which were already battered and bruised, were further bloodied. Among the worst of the lot was BIT Mining Ltd. (ticker BTCM) which plunged 36.60 percent yesterday, bringing its year-to-date loss to 79.9 percent. The graphic below shows how nine other crypto mining stocks performed yesterday. Year-to-date, these stocks have lost 60 to 85 percent of their market value. The companies are: Argo Blockchain PLC … Continue reading →

By Pam Martens and Russ Martens: June 13, 2022 ~ Welcome to Monday morning and market hell. As of 8:47 a.m. (ET) this morning, Dow futures are down 553 points; Bitcoin futures have lost 17 percent of their value on the news that cryptocurrency lender, Celsius Network, has frozen withdrawals. The 5-year Treasury note has spiked to yield 3.38 percent, a 50-basis point increase in a month, leading to an inverted yield curve against the 10-year Treasury note, which is trading at 9:01 a.m. (ET) this morning at a yield of 3.27 percent. (An inversion signals a rising recession risk.) All of this comes as the Fed has signaled that it will announce another interest rate hike this Wednesday, following the two-day meeting of its Federal Open Market Committee (FOMC). Stocks are developing a habit of tanking one day after Fed Chair Jerome Powell holds his FOMC Wednesday afternoon press conference, … Continue reading →

By Pam Martens and Russ Martens: June 10, 2022 ~ As we watched the two-hour public hearing on the critical facts uncovered by the House Select Committee on the attack on the U.S. Capitol on January 6, 2021, we kept waiting to hear a discussion of the money trail that facilitated this attack. That discussion never came. And yet, big expenses were involved: dozens of buses were rented; signs advertising “Stop the Steal” were on the sides of some of those buses; food and lodging had to be paid for, in or around expensive Washington, D.C.; and, now, lawyers have to be paid to represent those indicted for brutalizing police on January 6 or destroying and/or stealing government property. The House Select Committee did an excellent job last evening of providing the big picture on the plot to shred U.S. democracy in service to Donald Trump’s megalomaniac desires. But the question … Continue reading →

By Pam Martens and Russ Martens: June 9, 2022 ~ On September 14 of last year, we wrote this about SEC Chair Gary Gensler: “Gensler’s opening remarks at today’s Senate Banking Committee hearing include seven references to this phrase: ‘asked staff for recommendations…’ If past is prologue, this will mean that Gensler will run out the clock on actually advancing any meaningful ‘recommendations’ into concrete final rules.” Yesterday, Gensler gave a heavily promoted speech about cleaning up the way that retail stock orders are handled on Wall Street. But all the speech actually did was to ask his staff for more ideas and recommendations. The phrase “asked staff” appears 13 times in the speech. While Gensler spends his time giving speeches and asking his staff for recommendations that don’t go anywhere, large chunks of U.S. markets are blowing up in investor portfolios. Let’s start with some of the tech startups that … Continue reading →

By Pam Martens and Russ Martens: June 8, 2022 ~ According to the Federal Reserve’s Z.1 Statistical Releases, as of December 31, 1996 the market value of stocks (“corporate equities”) held by U.S. households and U.S. nonprofits stood at $10.255 trillion. As the dot.com bubble mushroomed, by December 31, 1999 that figure stood at $19.58 trillion. By the time all of the fraudulent research that went into listing and promoting stocks came to light, household and nonprofit wealth had shrunk by $8.6 trillion. From the end of Q4 1999 to the end of Q3 2002, the market value of household and nonprofit holdings went from $19.5812 trillion to $10.9601trillion. (See chart below.) Wall Street makes big bucks from underwriting new issues of stocks (Initial Public Offerings or IPOs) and so do the Big Law firms that serve as the underwriters’ counsel. It doesn’t matter if these companies have zero business operations … Continue reading →

By Pam Martens and Russ Martens: June 7, 2022 ~ The owner of Schlafer’s Auto Body & Repair in Mendocino, California has made headlines at CNN, the Los Angeles Times, and across local TV affiliates in the past few days – and not in a good way. Schlafer’s is home to an independent Chevron gas station and, as of this weekend, it was charging the highest price for a gallon of regular gas in the nation: $9.60. As of this morning, the average price for a gallon of regular gas in California is $6.37, according to AAA’s gas price tracker. AAA reports that the national average for a gallon of regular gas across the U.S. this morning is $4.91. California is far from the only state where complaints of outrageous price gouging are being heard. The Daily Record of Maryland reported yesterday that a Shell station in Bowie, Maryland was charging … Continue reading →

By Pam Martens and Russ Martens: June 6, 2022 ~ Last month the Federal Reserve Bank of New York released its 2021 annual report from its “Markets Group.” That’s the group that operates a trading floor (complete with speed dials to the trading houses on Wall Street) at the New York Fed, located not far from the New York Stock Exchange, as well as another trading floor on the premises of the Chicago Fed, which is not far from the futures exchanges in Chicago. That report showed that despite all of the recent talk about the Fed dramatically shrinking its balance sheet from its current size of $8.9 trillion, the internal Federal Reserve plan for the balance sheet is actually this: “After declining by about $2.5 trillion from the peak size reached in the first half of 2022, the portfolio stops declining in mid-2025, at which point it is held constant … Continue reading →

By Pam Martens and Russ Martens: June 2, 2022 ~ Redditors at the subreddit Superstonk are posting obscenities directed at Gary Gensler, Chair of the Securities and Exchange Commission (SEC), over the new ad campaign from the SEC that appears to target young Reddit investors as fools that do no research before investing, lose all their money, and deserve a whipped-cream pie in the face. (Yes, a young investor actually gets a whipped-cream pie in the face during two of the ads. See videos below.) CNBC ran one of the new SEC ads yesterday. So-called “meme stocks” are heavily associated with Reddit and are specifically called out in the SEC ads, thus Redditors have concluded that the ads are directed at them. We’ve been carefully observing the Securities and Exchange Commission for the past 37 years. This is the first time that we have ever witnessed the SEC heaping humiliation on … Continue reading →