By Pam Martens and Russ Martens: December 16, 2021 ~ The Federal Deposit Insurance Corporation (FDIC) is the agency that prevents financial panics from turning into catastrophic runs on banks by providing taxpayer-backstopped and government guaranteed insurance on deposits, up to $250,000 per depositor. Its leadership and honest governance is thus critically important to every American. So when a nasty public brawl breaks out between the Board of Directors of the FDIC and its Chairwoman, Jelena McWilliams, every American needs to sit up and pay attention. On Tuesday, Rohit Chopra, President Biden’s nominee who has been confirmed to lead the Consumer Financial Protection Bureau (CFPB), which automatically makes him a member of the Board of Directors of the FDIC, posted at the CFPB’s website serious charges against FDIC Chairwoman McWilliams – effectively stating that she was staging a one-woman coup against her Board and usurping their power to govern the FDIC. … Continue reading →

By Pam Martens and Russ Martens: December 15, 2021 ~ The Senate Banking Committee held a hearing yesterday titled “Stablecoins: How Do They Work, How Are They Used, and What Are Their Risks?” Senator Sherrod Brown (D-OH), the Chair of the Committee, set the tone for the hearing by including the following poignant remarks in his opening statement: “Last month, I wrote to some of the biggest stablecoin issuers to get more information on how they manage their funds that back their coins, and to ask what rights their users have. Their responses were not particularly enlightening – and should lead us to assume most ordinary customers don’t have much in the way of rights at all. “So let’s be clear about one thing: if you put your money in stablecoins, there’s no guarantee you’re going to get it back. They call it a currency, implying it’s the same as having … Continue reading →

By Pam Martens and Russ Martens: December 14, 2021 ~ FINRA is Wall Street’s self-regulator. Last Tuesday afternoon, December 7, we attempted to access the part of its website that houses data on Wall Street’s Dark Pools. The web page was there but the data wouldn’t open. We contacted FINRA via email and asked what the problem was. We were told that it was “a result of today’s Amazon Web Services issue.” Our problem at FINRA’s website was just the tip of the iceberg last Tuesday. As a result of problems at Amazon Web Services (AWS), Amazon’s cloud-service network, customers couldn’t get through to Delta Air Lines on its AWS-supported phone lines; the Associated Press was limited in what it could publish for much of the day; Barron’s reported it was negatively impacted; apps for McDonald’s and Ticketmaster and streaming services from Disney and Netflix were also knocked offline. Amazon delivery … Continue reading →

By Pam Martens and Russ Martens: December 13, 2021 ~ For years now, Wall Street On Parade has been reporting on the probing letters that Senator Elizabeth Warren (D-MA) has sent to Wall Street firms and their regulators in an effort to ferret out the details of systemic corruption and the looting of the American people. (See “Related Articles” below.) Throughout this letter writing campaign, Senator Elizabeth Warren has been a member of the powerful Senate Banking Committee – which has subpoena power. The new Chair of that Committee, Senator Sherrod Brown (D-OH), is also a progressive, like Warren. So why isn’t the Senate Banking Committee using its subpoena power instead of leaving Warren with nothing more than an inquiring mind and a pile of Word documents? According to the Congressional Research Service, the Senate Banking Committee has adopted a rule that requires a majority vote to issue a subpoena for … Continue reading →

By Pam Martens and Russ Martens: December 10, 2021 ~ On May 26 business media reported that the U.S. Department of Justice had opened a probe into the March collapse of the Archegos family office hedge fund. Archegos is believed to have leveraged $20 billion of its own capital into more than $100 billion in stocks and derivative exposure through margin loans tricked up as derivatives by some of the largest banks on Wall Street. One of the laws that the banks may have fallen afoul of is the Fed’s Regulation T. Under Reg T, broker dealers on Wall Street could not have loaned Archegos more than 50 percent to make its stock purchases. To get around this, the banks did not open a margin account for Archegos. Instead, the banks structured derivative contracts where they loaned as much as 85 percent of the money to Archegos to make the trades … Continue reading →

By Pam Martens and Russ Martens: December 9, 2021 ~ On October 12, Wall Street On Parade filed a Freedom of Information Act (FOIA) request with the Federal Reserve Board of Governors seeking the specific dates on which former Dallas Fed President, Robert Kaplan, had made purchases and sales in S&P 500 futures contracts in 2020. According to Kaplan’s financial disclosure forms, he had made “multiple” transactions of over $1 million in S&P 500 futures during 2020, the year that he sat as a voting member of the Federal Open Market Committee and was privy to the Fed’s unprecedented interventions in the market during the economic upheaval from the pandemic. (See Kaplan’s financial disclosure forms from 2015 through 2020 here.) Kaplan was under very precise instructions on his annual financial disclosure form to provide the “month, day, year” of each of his purchases of securities and each of his sales. But … Continue reading →

By Pam Martens and Russ Martens: December 8, 2021 ~ Yesterday, Cornell Law Professor, Saule Omarova, withdrew from her nomination to become the head of the Office of the Comptroller of the Currency (OCC), the regulator of national banks. Emily Flitter, reporting for the New York Times, said it was because Omarova had been “painted as a communist.” In terms of the full story on why Omarova had to withdraw, that is like pointing to a single droplet of rain as the cause of a hurricane. In October, the Vanderbilt Law Review published a 69-page paper by Omarova in which she made the following bizarre recommendations to reform the U.S. banking system: (1) Move all commercial bank deposits from commercial banks to so-called FedAccounts at the Federal Reserve; (2) Allow the Fed, in “extreme and rare circumstances, when the Fed is unable to control inflation by raising interest rates,” to confiscate deposits … Continue reading →

By Pam Martens and Russ Martens: December 7, 2021 ~ Last Friday, December 3, 2021, the Nasdaq stock market recorded 12 stocks setting new 52-week highs in contrast to 585 stocks setting new 52-week lows. Let that sink in for a moment. There were 48.75 times more stocks setting new 52-week lows than were reaching new 52-week highs. That extremely negative reading of market breadth came on a day when the Nasdaq closed down just 1.9 percent. Imagine what the breadth would have looked like if the percentage decline on the overall market had been worse. Yesterday, Monday, December 6, with the Nasdaq closing up 139.6 points, the new 52-week lows still swamped highs, with 137 new lows and only 53 new highs. Unfortunately, Americans never see headlines in their newspapers about the deterioration in the stock market’s underpinnings. What they do see on a regular basis are headlines about the … Continue reading →

By Pam Martens and Russ Martens: December 6, 2021 ~ Bitcoin was trading at over $57,000 on Friday. Over the next 24 hours it had plunged below $43,000. On some trading platforms, Bitcoin’s price was cut far below the $43,000 level. The Dow Jones news outlet, MarketWatch, reported that “NYDIG, a technology and financial services firm dedicated to bitcoin, said that the decline was even more severe for some offshore platforms such as Huobi, where bitcoin briefly touched a 24-hour nadir at $28,800 on Saturday.” Bitcoin front month futures on the CME at 7:49 a.m. ET this morning show it had bounced back to $48,715. This is hardly the first time this year that Bitcoin has put on a wild display of price swings. On May 19 Bitcoin removed any lingering doubts that it is a stable currency that could be used to pay for products or services. At that time … Continue reading →

By Pam Martens and Russ Martens: December 3, 2021 ~ Progressives are waiting with bated breath to see if President Joe Biden will show more moxie than former President Barack Obama when it comes to Wall Street regulation. So far, the record has been nothing short of bizarre. See here and here. When it came to Wall Street, Obama was all talk and no show. One gift to Wall Street that has been all but forgotten by progressives is that Obama was mandated under Section 1108 of the Dodd-Frank financial reform legislation of 2010 to appoint the very first Vice Chairman for Supervision of banks at the Federal Reserve. Instead, Obama served out his two terms as President without ever filling that mandated post. It was not until the Presidency of Donald Trump in 2017 – seven years after the passage of Dodd-Frank – that Randal Quarles was appointed the very … Continue reading →