By Pam Martens and Russ Martens: April 21, 2022 On September 7 of last year, Wall Street Journal reporter Mike Derby broke the story that “Federal Reserve Bank of Dallas President Robert Kaplan made multiple million-dollar-plus stock trades in 2020, according to a financial disclosure form provided by his bank….” Kaplan was a sophisticated trader who previously worked at Goldman Sachs for 22 years, rising to the rank of Vice Chairman. His financial disclosure forms suggest that Kaplan maintained a trading relationship with Goldman Sachs, since he lists proprietary products created by “GS,” short for Goldman Sachs. It would be highly inappropriate for Kaplan to have a trading relationship with Goldman Sachs since it is a bank holding company supervised by the Fed. The strange thing about Derby’s reporting on Kaplan is that it didn’t capture the most scandalous aspect of Kaplan’s trading. According to Kaplan’s financial disclosure forms, he was … Continue reading →

By Pam Martens and Russ Martens: April 20, 2022 ~ In addition to being a law professor at the University of Michigan, Michael Barr also holds the title as the “Joan and Sanford Weill Dean of Public Policy at the University of Michigan’s Gerald R. Ford School of Public Policy.” The Ford School sits in a building called the Joan and Sanford Weill Hall, which was given that name as the result of a $5 million donation from the Weills. To anyone who hasn’t been in a coma since the Wall Street crash of 2008 – an event that sent the U.S. economy into the worst economic collapse since the Great Depression – an affiliation with the name “Weill” should have been an automatic disqualifier for any position in the Biden administration even remotely connected to regulating Wall Street. Instead, at the behest of some powerful person or persons, Michael Barr … 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 14, 2022 ~ JPMorgan Chase’s publicly-traded shares closed out 2021 with a share price of $158.35. At the closing bell yesterday, shares of JPMorgan Chase were at $127.30, a year-to-date price decline of 19.6 percent. That’s dramatically worse than its peer bank, Wells Fargo, and modestly worse than another peer bank, Bank of America. That performance is shocking because the Chairman and CEO of JPMorgan Chase, Jamie Dimon, is paid like a rock star by his Board, treated like a financial wizard by the business press, and perpetually brags about his bank’s “fortress balance sheet” in his musings to Congress and shareholders. But the share price performance is not shocking if one considers that one of the artificial props under the share price for the past five years has been Dimon’s crony Board of Directors authorizing giant share buybacks of the stock. According to … Continue reading →

By Pam Martens and Russ Martens: April 13, 2022 ~ On March 31, the Federal Reserve finally released a trove of secret transaction data revealing which Wall Street trading houses had to borrow hundreds of billions of dollars from a panoply of Fed bailout programs. One of those bailout programs was the Fed’s Money Market Mutual Fund Liquidity Facility (MMLF) which bought paper residing in the money market funds of large Wall Street firms that no one else on the street wanted to buy – or at least at a price that would prevent staggering losses for the funds, which are supposed to trade at a stable $1 per share price. We have begun to unravel the cryptic details of the MMLF, although the Boston Fed which administered the program for the Federal Reserve used a bag of tricks to make that process as difficult as possible for journalists. For example, … Continue reading →

By Pam Martens and Russ Martens: April 12, 2022 ~ Multiple current and former Federal Reserve officials remain under investigation for the worst trading scandal in Fed history. This investigation includes the former President of the Dallas Fed, Robert Kaplan, who traded in and out of S&P 500 futures contracts in lots of “over $1 million” while sitting as a voting member of the Fed’s Open Market Committee (FOMC), which sets interest rates and makes other critical monetary policy decisions that move markets. The investigation also involves former Boston Fed President Eric Rosengren, who actively traded in a joint account with his wife, who had been given a margin account by a Fed supervised bank, Citigroup’s Citibank. (See our extensive archive on the Fed’s trading scandal.) Last Tuesday, President Biden’s nominee for Fed Vice Chair, Lael Brainard, who has been a Fed Governor since 2014 and has had a permanent voting … Continue reading →

By Pam Martens and Russ Martens: April 11, 2022 ~ On Thursday, March 31, the Federal Reserve released the names of the Wall Street trading houses and the amounts they had borrowed under three of the Fed’s emergency bailout programs. The data included the Fed’s repo loans for the first quarter of 2020 — the Fed is releasing the repo loan information after a two-year lag on a quarter-by-quarter basis, thus obfuscating a clear snapshot for the life of the program; the Fed’s Primary Dealer Credit Facility (PDCF); and the Fed’s Money Market Mutual Fund Liquidity Facility (MMLF). The Fed also released on March 31 the transaction details for its Commercial Paper Funding Facility but that essentially just showed which commercial paper had become toxic on Wall Street while the other three programs illustrated which units of the mega global banks had become illiquid and needed Fed bailouts stretching over many … Continue reading →

By Pam Martens and Russ Martens: April 7, 2022 ~ There is growing evidence that Russian President Vladimir Putin’s invasion of Ukraine and growing atrocities against Ukrainian civilians are not just delivering long-term damage to Russia’s reputation around the world but to its economy at home as sanctions begin to take a heavy toll. Automotive News Europe reported yesterday that “New vehicle sales fell 60 percent in March from the previous month at Rolf, Russia’s largest dealership….” Rolf’s CEO, Svetlana Vinogradova, told Reuters she expected full year demand to fall by half in 2022. Forecasts for overall economic contraction is Russia this year range from a 10 percent contraction forecast by Goldman Sachs to a 15 percent drop forecasted by the Institute for International Finance. Signs of a slowdown are already showing up in manufacturing. The S&P Global Purchasing Managers’ Index (PMI) for Russia fell to 44.1 in March. A reading … Continue reading →