By Pam Martens and Russ Martens: February 8, 2024 ~ The S&P 500 closed at a record of 4995.06 yesterday while banks – big, medium, and small – continued to see their share prices hammered. And while the media is focusing the public’s attention on the share price collapse of New York Community Bancorp, which as of yesterday’s closing price is down 56 percent year-to-date and had its credit rating downgraded to junk by Moody’s on Tuesday evening, numerous other banks are trading at their lowest levels in two years. Below is just a tiny sampling of what’s going on in the U.S. banking system (that you’re not reading about in the mainstream news). The chart above shows the share price performance over the past two years of the six banks described below. U.S. Bancorp, parent of U.S. Bank, is the 5th largest bank in the U.S. with $663.5 billion in assets … Continue reading →

By Pam Martens and Russ Martens: February 7, 2024 ~ New York Community Bancorp (NYCB) closed out 2023 with a share price of $10.23. At the closing bell yesterday, its share price was $4.20 – a year-to-date decline of 59 percent. More pain is expected today as the credit rating agency, Moody’s, cut the regional bank’s credit rating two notches to junk after the market closed yesterday. Moody’s noted in its downgrade that a third of the bank’s deposits lack FDIC insurance. Uninsured deposits were a key factor in the rapid meltdown of Silicon Valley Bank in March of last year as $146 billion in deposits attempted to exit the bank in the span of 48 hours, leading to the FDIC being forced to take the bank into receivership. NYCB’s rapid share price descent began on January 31 when the bank filed an 8K form with the SEC indicating a $260 million … Continue reading →

By Pam Martens and Russ Martens: February 6, 2024 ~ The Fed’s longstanding relationship with reporters who are allowed to attend the Fed Chair’s press conferences is akin to a master class in Stockholm Syndrome. Your survival in this room depends on your subservience to intellectual capture by the woman who runs this room with the precision of a heat-seeking missile. A growing number of Fed watchers believe that it is Michelle Smith, the Director of Communications at the Fed for the past 23 years, who is quietly cracking the whip. Smith is now such a critical part of policing every word spoken to the public by or about the Fed that she appeared walking beside Fed Chair Powell in one of his rare interviews on 60 Minutes this past Sunday. Consider the following cases of disappeared reporters from the Fed’s press conferences. On September 7, 2021, reporter Michael Derby of the … Continue reading →

By Pam Martens and Russ Martens: February 5, 2024 ~ On January 17, Jamie Dimon stunned CNBC viewers when he launched into what sounded like a TV commercial for Republican Presidential candidate and 91-count indictee Donald Trump. Dimon stated: “Take a step back, be honest. He was kind of right about NATO, kind of right about immigration. He grew the economy quite well. Tax reform worked. He was right about some of China…He wasn’t wrong about some of these critical issues.” Dimon also said that Democrats need to be more respectful of their fellow citizens that identify as MAGA Republicans. Former U.S. Labor Secretary Robert Reich was one of the folks who caught Dimon’s act and published a sharp retort, writing: “Kind of right about NATO? Trump wanted the U.S. to withdraw from NATO — and may get his way if he becomes president again. This would open Europe further to Putin’s aggression. “Kind of … Continue reading →

By Pam Martens and Russ Martens: February 2, 2024 ~ Yesterday, the U.S. Senate Banking Committee held a hearing under the title: “Examining Scams and Fraud in the Banking System and Their Impact on Consumers.” Let that title sink in for a moment – “Scams and Fraud,” “Banking System.” That’s the federally-insured banking system of the United States of America in which millions of Americans have entrusted their life savings because they believe it to be the safest place to put their money. Indeed, federally-insured banks had been the safest place to put money since 1933, when the Glass-Steagall Act was signed into law, until the repeal of the Act by the Wall Street friendly Bill Clinton administration in 1999. Thanks to that egregious repeal of critical consumer protection legislation, the following has happened: Trading casinos on Wall Street have been allowed to merge with federally-insured banks with a porous wall of … Continue reading →

By Pam Martens and Russ Martens: January 31, 2024 ~ Smart Americans have found two ways to outwit the wealth extraction machinery on Wall Street. They buy a home and build its value over time with sweat equity; and/or they start their own small business. A very large number of Americans who are living comfortably in retirement today built their wealth through one or both of these avenues. Wall Street banks, on the other hand, typically extract wealth from the little guy in a multitude of insidious ways – from high interest credit cards to excessive fees, tricked-up mortgages and outright frauds. Nothing better illustrated this wealth stripping than the 2013 PBS program from Frontline called The Retirement Gamble. The program documented the following: If you work for 50 years and receive the typical long-term return of 7 percent on the stock mutual funds in your 401(k) plan, and your fees are 2 … Continue reading →

By Pam Martens and Russ Martens: January 30, 2024 ~ While many other countries mandate that publicly-traded companies rotate their audit firms after a maximum number of years, there is no such requirement in the United States at the present time. The 10-K (annual report) that JPMorgan Chase filed with the Securities and Exchange Commission on February 21, 2023 carried this statement under the auditor’s name of PricewaterhouseCoopers LLP (PwC): “We have served as the Firm’s auditor since 1965.” Let that settle in for a few moments as we take a quick tour through the last 10 years of JPMorgan Chase’s history under the same Chairman and CEO, Jamie Dimon, and the same audit firm. In 2013, after the U.S. Senate’s Permanent Subcommittee on Investigations found that JPMorgan Chase had lied to its regulators while gambling in derivatives in London using depositors’ money from its federally-insured bank and losing $6.2 billion, the … Continue reading →

By Pam Martens and Russ Martens: January 29, 2024 ~ On July 27 of last year, the Vice Chair for Supervision at the Federal Reserve Board of Governors, Michael Barr, made the following statement as part of the proposed new capital requirements for mega banks in the U.S. – revealing the stunning news that the serially-charged mega banks on Wall Street have been allowed to use their own internal risk models to tell the Fed how much risk-weighted assets they have and, thus, how much capital they need to hold. Barr stated: “For a firm’s lending activities, the proposed rules would end the practice of relying on a bank’s own individual estimates of their own risk and instead use a standardized, but risk-based measure of credit risk. Standardized credit risk approaches do a reasonably good job of approximating risks, while internal models are prone to underestimate such risks. “Second, for a firm’s … Continue reading →

By Pam Martens and Russ Martens: January 25, 2024 ~ Last Thursday, 12 Democrats in the U.S. Senate sent a deeply insightful letter on a subject most Americans have never discussed around their kitchen table: adequate capital levels at the Wall Street mega banks that came close to bringing down the U.S. financial system in 2008. Before that financial crisis was over – the worst since the Great Depression of the 1930s – millions of hardworking Americans had lost their jobs and millions more had their homes taken in foreclosure. If the U.S. is going to avoid a replay of that crisis, Americans are going to have to start having these critical conversations about the structure of Wall Street mega banks around the kitchen table. Americans are going to have to start engaging in the battle to shape the future of American democracy and more equitable wealth distribution, which requires dramatic reform … Continue reading →

By Pam Martens and Russ Martens: January 24, 2024 ~ To read main stream media headlines, one would think that the Federal Reserve Inspector General’s Office has exonerated former Dallas Fed President Robert Kaplan of any legal action for trading like a hedge fund kingpin while he was privy to insider information at the Fed. In fact, all that the Inspector General’s report has cleared Kaplan of is this: “we did not find that his trading activities violated laws, rules, regulations, or policies related to trading activities as investigated by our office.” What the Inspector General did not investigate is everything that a real insider trading investigation would have encompassed. It did not investigate if Kaplan was shorting the market with his $1 million plus trades in and out of S&P futures contracts during a declared National Emergency over the COVID pandemic while making market diving predictions on TV; it did not … Continue reading →