By Pam Martens and Russ Martens: September 10, 2024 ~ Both Bloomberg News and the Wall Street Journal have now reported that it’s not just presidential candidate Donald Trump that is proposing a U.S. Sovereign Wealth Fund, but that President Joe Biden’s administration is also exploring the idea. The Wall Street Journal reported as follows on the Biden plan late Sunday night: “It isn’t clear how far the White House plan, overseen by national security adviser Jake Sullivan and his deputy Daleep Singh, is from completion, or whether Vice President Kamala Harris, the Democratic presidential candidate, supports it. A Harris spokesman didn’t respond to a request for comment.” The advisor on Trump’s plan for a U.S. Sovereign Wealth Fund is John Paulson – a hedge fund billionaire not particularly known for putting the national security interests of America ahead of his own greed. (See our reporting yesterday for background on Paulson’s shorting of the U.S. … Continue reading →

By Pam Martens and Russ Martens: September 9, 2024 ~ Last Thursday, Republican presidential candidate Donald Trump spoke before the Economic Club of New York. During the speech, Trump revealed that if he wins the election he will create a U.S. Sovereign Wealth Fund. Sovereign Wealth Funds are what countries that are rich from oil exports create with their surplus budget balances in order to diversify their nation’s investments. (Countries such as Norway, Saudi Arabia, Abu Dhabi, Kuwait, and numerous other countries have Sovereign Wealth Funds.) Not only does the U.S. not have any budget surpluses to invest but it is projected to have a $1.9 trillion budget deficit this fiscal year as well as having an existing national debt of $35.4 trillion. Trump explained his plan as follows in his speech at the Economic Club of New York: “We’ll create America’s own sovereign wealth fund to invest in great national … Continue reading →

By Pam Martens and Russ Martens: September 5, 2024 ~ Most market watchers rely on the monthly margin debt figures published by Wall Street’s self-regulator, FINRA, as the reliable gauge in determining how much of securities trading on Wall Street is being done with borrowed money, known as margin debt. According to the FINRA data, as of March 31, 2024, margin debt stood at $784.136 billion. Unfortunately, FINRA only has access to margin debt data filed by the brokerage firms it regulates (also known as brokers and dealers). Thanks to the repeal of the Glass-Steagall Act in 1999, which allowed federally-insured banks to be gobbled up by the trading casinos on Wall Street, the vast bulk of margin debt is now being loaned out not by brokerage firms but by giant banks where the U.S. taxpayer will be on the hook for a bailout if they go belly up from bad … Continue reading →

By Pam Martens and Russ Martens: September 4, 2024 ~ It appears that Senator Elizabeth Warren was spot on in her assessment of the lack of a backbone for Federal Reserve Chairman Jerome Powell when it comes to raising capital requirements on the powerful megabanks on Wall Street. At a March 7 Senate Banking Committee hearing in which Powell was appearing as a witness, Warren said this: “Despite all you said last year when the banks failed [in the spring banking crisis of 2023] about supporting Vice Chair Barr’s recommendations to strengthen rules for big banks, public reporting now says that you are driving efforts inside the Fed to weaken the capital rule. You even told the House Financial Services Committee representatives yesterday that you think it’s ‘very plausible’ that you withdraw the rule.” The capital rule that Senator Warren is referring to was proposed more than a year ago by … Continue reading →

  By Pam Martens and Russ Martens: September 3, 2024 ~ The Office of Financial Research (OFR), the federal agency created after the 2008 financial collapse on Wall Street to defog the lenses of federal regulators to prevent a replay of that disaster, has posted frightening graphs on its website as part of its “Hedge Fund Monitor.” Particularly alarming is the overall takeaway that the U.S. megabanks that are receiving federal deposit insurance that is backstopped by hardworking and law-abiding U.S. taxpayers, are using their lending ability to make massive loans to dodgy, giant hedge funds that are regularly found to be on the wrong side of the law and/or engaging in wildly risky behavior. Equally concerning is whether megabank lending to giant hedge funds is sapping their ability to make loans to worthy U.S. businesses that are engaged in the real economy rather than the financial casino economy of hedge … Continue reading →

By Pam Martens and Russ Martens: August 27, 2024 ~ The P.R. genius at JPMorgan Chase that thought it would be a good idea to have Jamie Dimon lecture the next president of the United States on how to run the country in an OpEd (paywall) at the Washington Post will likely be seeking a career change soon. Dimon is the Chairman and CEO of the largest and riskiest bank in the United States. Under Dimon’s tenure, the bank has racked up five felony counts which showcase Dimon as the worst possible source of sound leadership advice. In 2014, the bank was charged with laundering money for decades for the biggest Ponzi artist in U.S. history – Bernie Madoff. In 2015, the bank was charged with being part of a bank cartel that rigged foreign currency markets. And in 2020, the bank was charged with two more felony counts for engaging … Continue reading →

By Pam Martens and Russ Martens: August 26, 2024 ~ On May 12, 2023, the U.S. Department of Justice announced that it had extradited from the United Kingdom, Michael Lynch, the former CEO of Autonomy Corporation, to stand trial in the Northern District Court of California, alongside the former Vice President of Finance at Autonomy, Stephen Chamberlain. Among the numerous charges brought by the Justice Department were these: “…between 2009 and 2011, Lynch and Chamberlain, and other co-conspirators, (1) artificially inflated Autonomy’s revenues by backdating written agreements to record revenue in prior periods; recorded revenue on contracts that were subject to side letters or other contingencies that impacted revenue recognition; and improperly recorded revenue for reciprocal or roundtrip transactions…” As part of this alleged scheme to defraud, according to the Justice Department, “…Lynch and Chamberlain caused Autonomy to make materially false and misleading statements directly to HP [Hewlett-Packard] regarding Autonomy’s financial … Continue reading →

By Pam Martens and Russ Martens: August 23, 2024 ~ Last year, the staff of a federally-insured bank in Kansas, Heartland Tri-State Bank, wired out more than one-third of the amount the bank held in deposits to a crypto scam. Why did they do that? Because the CEO of the bank, Shan Hanes, told them to do it. Hanes had become one more crypto sucker seduced by the allure of a get-rich-quick scheme. On Monday, Hanes was sentenced in a case brought by the U.S. Department of Justice to 24 years in prison for embezzling $47.1 million (via the wire transfers shown in the graph above) from the bank he was in charge of protecting. The bank failed last July with the Federal Deposit Insurance Corporation (FDIC) stepping in to make depositors whole while the investors in the bank (shareholders) were wiped out. There’s an old saying on Wall Street: “Bulls … Continue reading →

By Pam Martens and Russ Martens: August 20, 2024 ~ As indicated on the above graph, as of December 31, 2023, Goldman Sachs Bank USA, JPMorgan Chase Bank N.A., Citigroup’s Citibank and Bank of America held a staggering total of $168.26 trillion in derivatives out of a total of $192.46 trillion at all federally-insured U.S. banks, savings associations and trust companies. That’s just four banks holding 87 percent of all derivatives at all 4,587 federally-insured financial institutions in the U.S. that existed as of December 31, 2023. You might be asking yourself the very valid question as to why the Dodd-Frank financial reform legislation of 2010, that followed the Wall Street financial quake of 2008, didn’t correct the derivatives gambling that played a central role in crashing the U.S. financial system. For why the threat of derivatives never actually went away, see our report: Meet the Two Congressmen Who Facilitated Today’s Derivatives … Continue reading →

By Pam Martens and Russ Martens: August 15, 2024 ~ A fascinating new academic paper has been released. Its title is “The Myth of Fed Political Independence.” Its premise is this: “The much-vaunted independence of the Federal Reserve is a myth. The Fed is not the bastion of sound monetary policy. Rather, it is just another politically coopted agency of the federal government.” The study asserts further that “Something like the Stockholm syndrome seems to describe the institutional relationship that exists between the U.S. Congress and the White House (the captors), and the Federal Reserve (the captives). The paper is written by Thomas Joseph Webster, Professor Emeritus of Economics at Pace University’s Lubin School of Business, who has written extensively on the Fed and the role that its quantitative easing has played in ballooning budget deficits, the national debt and inflation. Dr. Webster previously worked as an international economist with the … Continue reading →