Search Results for: JPMorgan

By Pam Martens: May 5, 2022 ~ At the Fed’s press conference yesterday, Federal Reserve Chair Pro Tempore Jerome Powell was asked by Mike McKee of Bloomberg Television a series of questions on monetary policy which ended with this: “Are you concerned about Fed credibility with the American people?” Powell answered the monetary policy questions but did not directly address the credibility issue. McKee then repeated the question, phrased as follows: “Do you think the Fed has a credibility problem?” Powell’s answer provides an alarming insight into with whom the Fed seeks to maintain confidence. Powell said this: Powell: “No. I don’t. A good example of why would be that—so in the fourth quarter of last year, as we started talking about tapering sooner and then raising rates this year, you saw financial markets reacting, you know, very appropriately. Not to bless any particular day’s measure, but the way financial markets—you … Continue reading →

By Pam Martens and Russ Martens: April 27, 2022 ~ As long-term readers of Wall Street On Parade know well, we have regularly warned that the failure of Congress to meaningfully reform Wall Street by restoring the Glass-Steagall Act poses a national security threat to our nation in times of crisis. Instead of meaningful reform, Congress has stood by and watched the Fed bail out the global banks repeatedly since 2008 – either with direct loans or by keeping interest rates artificially low (“administered rates”) or through trillions of dollars in asset purchases from the banks (what the Fed prefers to call Quantitative Easing). The Fed’s balance sheet has ballooned from less than $1 trillion before the financial crisis in 2008 to $9 trillion today as a result of its willingness to perpetually bail out Wall Street. American taxpayers are on the hook for 98 percent of the Fed’s balance sheet … Continue reading →

By Pam Martens and Russ Martens: April 26, 2022 When the U.S. Bureau of Labor Statistics released its Consumer Price Index (CPI) report on April 12, it showed that inflation had surged to the highest rate in 40 years, reaching 8.5 percent in March compared to the same month a year ago. The CPI report for February had shown a year-over-year increase of 7.9 percent – meaning that inflation had surged further in March and the Fed’s target of 2 percent inflation was getting further out of reach. While inflation has soared, supply bottlenecks from the pandemic and now Russia’s war in Ukraine are pushing down Gross Domestic Product (GDP) expectations. The highly-respected GDPNow model from the folks at the Atlanta Fed puts first quarter GDP in the U.S. at a tepid 1.3 percent. (That figure will be updated later today following the release of new home sales for March at … Continue reading →

By Pam Martens and Russ Martens: April 25, 2022 The Federal Reserve (the Fed) is the central bank of the United States. It sets monetary policy, including control of the benchmark short-term interest rate known as the Federal Funds rate, or in Wall Street jargon, the “Fed Funds” rate. This is a key rate because it signals the rate at which overnight loans are made between financial institutions and the direction of interest rates in general. Unfortunately, over time, the Fed has also been granted a supervisory role by Congress over Wall Street’s megabanks alongside its ability to bail them out when its crony brand of supervision fails. There was an epic failure in the Fed’s supervision of the Wall Street megabanks in the leadup to the 2008 financial crash and the September 2019 repo blowup. In both cases, the Fed made trillions of dollars in cumulative loans at below-market interest … Continue reading →

By Pam Martens and Russ Martens: April 19, 2022 ~ For the past week, Wall Street On Parade has been crunching the cryptic data released by the Federal Reserve on March 31 that named the mutual funds that couldn’t meet redemption requests in their money market funds in March and April of 2020 without tapping loans from the Fed. As we reported yesterday, the Fed loaned a cumulative total of $162.9 billion from its Money Market Mutual Fund Liquidity Facility (MMLF) in March and April of 2020 with 72 percent of that total going to just six mutual fund families: Federated $27.75 billion; JPMorgan $24.8 billion; Morgan Stanley $19.55 billion; UBS $17.3 billion; Wells Fargo $15.5 billion; and BlackRock $11.98 billion. There are two striking aspects to this story. First, no mainstream media outlet will go near the story. The same media outlets that battled the Fed in court for more … Continue reading →

By Pam Martens and Russ Martens: April 18, 2022 ~ The Federal Reserve has set up a veritable obstacle course to prevent the public from drilling down to see that just six big Wall Street firms received the lion’s share of loans from its emergency funding facility called the Money Market Mutual Fund Liquidity Facility (MMLF). The MMLF made emergency loans from March 23, 2020 through April 23, 2020, but the program did not end on April 23, 2020. That’s because these were not overnight loans. They were loans made for periods up to as long as 11 months in some cases – taking the program into 2021. The MMLF made loans against paper that could not be sold elsewhere that was sitting in money market funds that were having difficulty raising cash to meet redemption requests. The loans were for the same maturity as the paper being put up … Continue reading →

By Pam Martens and Russ Martens: April 6, 2022 ~ As the chart above indicates, from March 20, 2020 through May 12, 2021 the share prices of the French global bank BNP Paribas, the Canadian global bank, Royal Bank of Canada, and the German global bank, Deutsche Bank, were surging in value. But unbeknown to the marketplace, thanks to a dark curtain the Federal Reserve of the United States drew tightly around one of its secret loan programs, the trading units of these three foreign global banks were being propped up with vast sums of cheap loans during that span of time by the Fed. The secret loan program was the Primary Dealer Credit Facility (PDCF) – the same program the Fed used during and after the Wall Street collapse in 2008 to funnel $8.9 trillion in cumulative loans to foreign and domestic trading houses and banks, according to an audit … Continue reading →

By Pam Martens and Russ Martens: April 5, 2022 ~ Throughout 2020, Fed Chair Jerome Powell repeatedly testified to Congress that the banks in the U.S. had proven to be a “source of strength” during the pandemic. Last Thursday the Fed released the names of the banks and dollar amounts they had needed to borrow under some of the Fed’s emergency loan operations. The data showed that units of two of the largest depository banks in the country, JPMorgan Chase and Citigroup, had required vast sums from the Fed’s emergency repo loan operations as well as its Primary Dealer Credit Facility (PDCF). In the Fed’s first report to Congress on its Primary Dealer Credit Facility which provided a dollar amount outstanding, the Fed reported that “the total outstanding amount” as of April 14, 2020 was $34.5 billion. The PDCF was announced on March 17, 2020 and began making loans on March … Continue reading →

By Pam Martens and Russ Martens: April 4, 2022 ~ The Federal Reserve, the central bank of the United States, has a “dual mandate” to target inflation and to maintain “maximum sustainable employment.” The Fed has zero mandate to target a specified level for the Dow Jones Industrial Average or to prevent stock market crashes by printing money out of thin air and pumping it out to the trading houses on Wall Street. But under Fed Chair Ben Bernanke during the Wall Street crisis in 2008 and Fed Chair Jerome Powell in 2019-2020, that’s exactly what the Fed decided to do. The majority of the stock market is owned by the wealthiest 10 percent of Americans. Thus, when the stock market is bailed out by the Fed, which we can now show overtly occurred from March 9 through March 16 of 2020, the Fed is effectively bailing out the rich. The … Continue reading →

By Pam Martens and Russ Martens: March 31, 2022 ~ As thousands of businesses were forced to close in the U.S. as a result of the coronavirus outbreak in March of 2020, and millions of Americans were financially struggling, the Federal Reserve was pumping what would become a cumulative $3.84 trillion in secret repo loans into the U.S. trading unit of the giant French global bank, BNP Paribas, in the first quarter of 2020. The repo loan market is where banks, brokerage firms, mutual funds and others make loans to each other against safe collateral, typically Treasury securities. Repo stands for “repurchase agreement.” The Fed only comes to the rescue of this market when there is a liquidity crisis and Wall Street firms are backing away from lending to each other. September 17, 2019 was the first time the Fed had to intervene in the repo market since the financial crisis … Continue reading →