By Pam Martens and Russ Martens: February 2, 2022 ~ As we reported on Monday, there’s a new book out from Simon & Schuster with the provocative title: The Lords of Easy Money: How the Federal Reserve Broke the American Economy. The book, written by bestselling author Christopher Leonard, is sprinkled with eye popping revelations – particularly in regard to how hedge funds have been able to effectively mint billions by designing trades to take advantage of the Fed’s repo bailouts and quantitative easing. Quantitative easing (QE) is a scheme launched by former Fed Chair Ben Bernanke, beginning in November 2008. QE means that the New York Fed, through its open markets desk, buys up Treasury securities and federal-agency-backed Mortgage-Backed Securities (MBS) from its 24 primary dealers. The Fed’s purchases of tens of billions of dollars a month of these securities creates artificial demand that would not otherwise exist, thus lowering … Continue reading →

By Pam Martens and Russ Martens: February 1, 2022 ~ Adding to a very long laundry list of questions about exactly whom the New York Fed serves, is the help-wanted ad that was posted four days ago. The ad is for a Financial Planning & Analysis Expert to work at the New York Fed’s headquarters in lower Manhattan. One part of the job description is this: “modelling of potential investment opportunities.” The New York Fed is supposed to be implementing monetary policy on behalf of the United States as mandated by the Federal Open Market Committee (FOMC). As far as public FOMC records indicate, the New York Fed has not been assigned the job of seeking out “potential investment opportunities.” So for whom is it seeking out these investment opportunities? Is it looking for profit-making investments for the Wall Street megabanks who own it and whose CEOs rotate on and off … Continue reading →

By Pam Martens and Russ Martens: January 31, 2022 ~ On January 11, Simon & Schuster released a new book on the Fed. It’s written by bestselling author and business reporter, Christopher Leonard. The title leaves little doubt about what the author has set out to prove: The Lords of Easy Money: How the Federal Reserve Broke the American Economy. For those of us who have been scrutinizing the trading operations of the New York Fed for decades, with the appropriate amount of skepticism that is inexplicably missing among the mainstream press, Leonard delivers a bombshell on page 242. Leonard writes: “The conference room in the New York Fed was located just off the main trading floor, and its doors were open during meetings so people could quietly go in and out. The room was anchored by a large table, with a couch along the wall for staffers to sit with … Continue reading →

By Pam Martens and Russ Martens: January 28, 2022 ~ Fed Chair Jerome Powell’s press conferences are torturous zombie affairs even for Fed wonks like us. The vast majority of questions coming from the press strictly adhere to coloring inside the lines. That means only slight variations on endless questions about inflation, asset tapering, timing of rate hikes and similar snoozers. We were struggling to avoid nodding off during Powell’s press conference this past Wednesday when the Fed and economic reporter for Bloomberg News, Craig Torres, jolted us upright in our chair. Torres asked Powell a wonky question and then appended a follow up question about the Fed’s trading scandal. That part of the exchange went as follows: Torres: “Chair Powell, I have a quick administrative question. You know, Robert Kaplan’s disclosure of his securities transactions: In a couple of months, Chair Powell, or maybe sooner, you and I will file … Continue reading →

By Pam Martens and Russ Martens: January 27, 2022 ~ The last thing a volatile stock market needs right now is more surprises from the dark corners of Wall Street. Unfortunately, we can guarantee you that more surprises are coming in the way of uncleared derivatives blowing up on the balance sheets of publicly-traded corporations. How do we know this? The information in the chart above comes from a study quietly released last July by the Office of Financial Research (OFR). That’s the federal agency that provides research to bank regulators to prevent systemic financial contagion from taking down the Wall Street megabanks and the U.S. economy in another replay of 2008. What the study actually shows, however, is that neither Congress nor bank regulators have done anything meaningful to prevent derivatives from once again blowing up the world’s largest economy. Instead, the watchdogs have simply allowed a rearrangement of … Continue reading →

By Pam Martens and Russ Martens: January 26, 2022 ~ Wall Street On Parade has the following business model: we focus our attention on research and bringing important facts and news about Wall Street and its perpetual sugar daddy, the Fed, to our readers. If our readers feel these articles deserve a wider circulation, we encourage them to link to them on their own social media pages. This spares us the downtime of engaging on social media, thus giving us more time for research. This business model has worked well for us for a decade. On January 14 we were doing research for an upcoming article when we accidentally stumbled upon a Twitter page called @wallstonparade. It was using our full trademarked name, “Wall Street On Parade,” and displaying our copyright. It was also using our slogan: “A Citizen Guide to Wall Street” and posting sections of our daily articles. Fortunately, … Continue reading →

By Pam Martens and Russ Martens: January 25, 2022 ~ The Office of Financial Research (OFR) is the federal agency created under the Dodd-Frank financial reform legislation of 2010. Its role is to provide early warnings to U.S. bank regulators and the public of systemic risks that threaten U.S. financial stability, so that another 2008-style Wall Street crisis can never again devastate the U.S. economy. The OFR was doing an outstanding job of sounding alarm bells until the Trump administration gutted the agency. The Biden administration has clearly not done enough to restore the integrity of the office. Consider the research report that was released by the OFR on July 12 of last year, which we just discovered yesterday. The report is titled: “Counterparty Choice, Bank Interconnectedness, and Systemic Risk.” The researchers, Andrew Ellul and Dasol Kim, examined 18 different over-the-counter (OTC) derivative markets and noted the following: “Bank interconnectedness through … Continue reading →

By Pam Martens and Russ Martens: January 24, 2022 ~ Bloomberg News ran this headline over the weekend: “U.S. Stocks Historically Deliver Strong Gains in Fed Hike Cycles.” For a reminder to our readers of what happened in 2018, the last time the Fed gently tapped its foot on the brake four times, we’ve listed below some of the headlines we ran in 2018 at Wall Street On Parade. The Fed was not at all aggressive with rate hikes in 2018: it gently raised the Fed Funds rate by a quarter of a point on March 22, June 14, September 27 and December 20. But that was enough to deeply unsettle markets – particularly the megabanks on Wall Street. Consider these headlines and the details in the articles: Yesterday’s Stock Market Plunge Saw Indiscriminate Dumping of Stocks Wall Street Banks Tank Yesterday as Contagion Threat Grows The Fed Gives Wall … Continue reading →

By Pam Martens and Russ Martens: January 21, 2022 ~ In her 2007 book, Tulipmania: Money, Honor, and Knowledge in the Dutch Golden Age, Anne Goldgar writes that a tulip bulb in 1637 sold for the equivalent of $12,000 in 2007 money. Now think about the tens of millions of dollars that were spent last year for one NFT.  It’s pretty clear that Tulipmania has nothing on the Fed-induced Bubblemania that is currently in the early stages of The Great Unwind. Goldgar points out that as historians have looked back, the tulip mania of the 1630s in Holland has become a “byword for idiocy.” At least a tulip bulb is a thing of beauty that reblooms year after year. Bitcoin, called “rat poison squared” by Warren Buffett, one of the smartest investors of all time, is not a thing of beauty, has nothing backing it, and is currently in free fall. After … Continue reading →

By Pam Martens and Russ Martens: January 21, 2022 ~ Yesterday’s headline making the rounds was that JPMorgan Chase’s Board had given its Chairman and CEO, Jamie Dimon, a pay raise to $34.5 million for 2021 that was 10 percent more than 2020. That headline provides an instructive lesson in what passes for breaking news today at mainstream media outlets when it comes to Wall Street’s megabanks. The majority of Americans aren’t outraged and demanding that Congress reform Wall Street because mainstream media has overtly decided to keep the public in the dark. The real breaking news is that despite JPMorgan Chase admitting to five criminal felony counts brought by the U.S. Department of Justice over the past 7 years for rigging markets and laundering money for Bernie Madoff, the financial criminal of the century, the Board of JPMorgan Chase has not sacked Dimon, the man who sat at the helm … Continue reading →