Search Results for: Federal Reserve

By Pam Martens and Russ Martens: November 24, 2020 ~ Late yesterday afternoon, while the stock market was still open, three reporters at the Wall Street Journal penned an article with this opening statement: “President-elect Joe Biden plans to nominate former Federal Reserve Chairwoman Janet Yellen, an economist at the forefront of policy-making for three decades, to become the next Treasury secretary, according to people familiar with the decision.” Within the next half hour, every major newswire and many of the largest newspapers in the U.S. were repeating the Journal’s story. The Journal noted that the Biden camp wasn’t expected to make a “formal announcement” of the Yellen nomination until November 30. Nonetheless, the Journal decided it had the self-anointed right to stand in for the Biden transition team and make the announcement a week ahead of time. To induce a nice big stock market rally on the news (the … Continue reading →

By Pam Martens and Russ Martens: November 23, 2020 ~ Fourteen days before U.S. Treasury Secretary Steve Mnuchin released a letter to Federal Reserve Chair Jerome Powell, demanding the return of taxpayers’ money and the end to specific Fed emergency programs by the end of the year, four Senate Democrats had written to Mnuchin and Powell asking them to extend those very same emergency programs. The Senate Democrats who authored the letter were Senators Sherrod Brown of Ohio, Elizabeth Warren of Massachusetts, Mark Warner of Virginia and Chuck Schumer of New York. The letter explained that “As of September, 3.8 million workers suffered permanent job losses, with 2.4 million considered long-term unemployed. Moreover, according to an analysis from Moody’s, without more federal support, another 3 million teachers, nurses, emergency responders, firefighters, and others from around the country will lose their jobs in the next two years.” The Senators outlined sensible … Continue reading →

By Pam Martens and Russ Martens: November 20, 2020 ~ Yesterday, U.S. Treasury Secretary Steve Mnuchin stunned markets by demanding in a letter to Federal Reserve Chairman Jerome Powell that the Fed return Treasury funds that are backstopping the bulk of its emergency lending programs and wind down these programs by year’s end. Adding further shock, the Fed rebuked the idea with its own statement, saying this: “The Federal Reserve would prefer that the full suite of emergency facilities established during the coronavirus pandemic continue to serve their important role as a backstop for our still-strained and vulnerable economy.” At issue in this newly-emerged war between Treasury and the Fed is $454 billion, $340 billion of which has yet to be accounted for. The process has played out as follows: On March 27, 2020 President Trump signed the CARES Act emergency stimulus plan into law. That law instructed the Treasury … Continue reading →

By Pam Martens and Russ Martens: November 17, 2020 ~ Last Thursday, during the House Financial Services Committee hearing with federal regulators of banks, Congresswoman Katie Porter of California told the Vice Chairman for Supervision of the Federal Reserve, Randal Quarles, that the Fed has a “big problem.” Porter has a Harvard Law degree and was previously a law professor at the University of California Irvine School of Law. If Porter believes the Fed has a legal problem, it is highly likely it does. Here’s how the exchange between Porter and Quarles went: Porter: “The Fed is largely responsible for dispensing the $500 billion Congress provided as a bailout for corporate America – the biggest bailout in our country’s history, potentially. Using taxpayer dollars to buy bank debt was never part of that plan. In fact, the Federal Reserve stated explicitly in this document [holds up document] that it would … Continue reading →

By Pam Martens and Russ Martens: November 13, 2020 ~ The Vice Chairman for Supervision at the Federal Reserve, Randal Quarles, dropped a bombshell during the House Financial Services Committee hearing held yesterday, but because mainstream media ignores these hearings unless they have something to do with Donald Trump, this critical news went unreported. Congressman Bill Foster of Illinois addressed Quarles with this statement: “The Treasury market is the most liquid fixed income market in the world. It serves as a critical benchmark for other bond markets that are essential. It allows the U.S. Dollar to operate as the world’s dominant reserve currency. That is why it is crucial that these financial pipes continue to function well, especially as we continue to fight COVID-19 and we work to provide fiscal relief to millions of struggling families and small businesses. “When the Fed has to step in to support the market … Continue reading →

By Pam Martens and Russ Martens: November 11, 2020 ~ The U.S. Senate Banking Committee held a virtual hearing yesterday that was benignly titled “Oversight of Financial Regulators.” It would be an understatement to say that there was nothing benign about the hearing. Fireworks went off throughout the hearing as Democratic Senators let it be known that they expected the crony relationship between the Fed and the Wall Street banks to be challenged by the incoming Biden administration. Senator Sherrod Brown set the tone for the hearing with his opening remarks, telling the panel of Trump era federal banking regulators the following: “We can get small businesses back on their feet. We can lift up the Black and brown communities that have been hit the hardest by this pandemic. We can keep people in their homes, make those homes more affordable, and bring down people’s energy bills. We can lead … Continue reading →

By Pam Martens and Russ Martens: November 2, 2020 ~ The U.S. stock market, as measured by the Dow Jones Industrial Average, lost 1,833.97 points last week. The Dow was down every day except Thursday, when it eked out a gain of 139.16. The market was reacting to the following bad news: soaring cases of COVID-19 in the U.S.; a reemergence of the virus in Europe causing business shutdowns there; the failure of the U.S. Congress to pass a new stimulus bill; and a sharply lower price for West Texas Intermediate (WTI), domestic crude oil – which signals a further slowdown in economic activity. (At 7 a.m. this morning, WTI was down further, with a $34 handle.) The stock market’s losses would have likely been greater last week were it not for an intervention staged by the Federal Reserve at 11:00 a.m. on Friday. Here’s what happened and why Americans … Continue reading →

By Pam Martens and Russ Martens: October 28, 2020 ~ At 9:10 a.m. this morning, Dow futures were showing a loss of 623 points, signaling another nasty open for the stock market following Monday’s plunge of 650 points and a 222-point loss yesterday. The sell-off in futures this morning is being blamed on the rising number of COVID-19 cases in Europe and the U.S. and the failure of the U.S. Congress to pass a stimulus bill to cushion the coming economic fallout. But tomorrow morning will bring a report showing a huge pop in Gross Domestic Product (GDP) for the third quarter, and the Trump campaign can be expected to spin it into a rallying cry at campaign events. At 8:30 a.m. tomorrow, the Bureau of Economic Analysis, a unit of the U.S. Department of Commerce, will report how the U.S. economy grew from July 1 through September 30. According … Continue reading →

By Pam Martens and Russ Martens: October 27, 2020 ~ Congresswoman Katie Porter has never met an overpaid Wall Street billionaire that she couldn’t reduce to a flummoxed whimperer within a few minutes. (See video clip below of Porter and Jamie Dimon, Chairman and CEO of JPMorgan Chase, during an April 10, 2019 House hearing.) Porter has had the Chairman of the so-called “independent” Federal Reserve in her radar since he appeared at a House Financial Services Committee hearing on February 11 of this year. At the hearing, Porter held up a photo of Fed Chair Jerome Powell in black tie outside the mansion of billionaire Jeff Bezos, CEO of Amazon. Porter said this: “Can you imagine how attending a lavish party at Jeff Bezos’ $23 million home, along with Jared and Ivanka and the CEO of JPMorgan Chase, Jamie Dimon, might give off the sense to the public that … Continue reading →

By Pam Martens and Russ Martens: October 26, 2020 ~ On Friday, the print edition of the New York Times carried this headline over a column by Paul Krugman: “How Many Americans Will Ayn Rand Kill?” (The digital headline reads: “When Libertarianism Goes Bad.”) Krugman makes the following points: libertarian rhetoric is all about “freedom” and “personal responsibility.” Politicians in states filled with the Ayn Rand crowd refuse to issue mandates to wear masks, believing this comes under the Ayn Rand screed that individual choice must always triumph. Krugman correctly defines this failed logic as follows: “Many things should be matters of individual choice. The government has no business dictating your cultural tastes, your faith or what you decide to do with other consenting adults. “But refusing to wear a face covering during a pandemic, or insisting on mingling indoors with large groups, isn’t like following the church of your … Continue reading →