Search Results for: Janet Yellen

By Pam Martens and Russ Martens: November 30, 2023 ~ The Office of Financial Research (OFR) is a unit of the U.S. Treasury Department. OFR was created as part of the Dodd-Frank financial reform legislation of 2010 to keep the Financial Stability Oversight Council (F-SOC) informed about emerging threats that have the potential to spread contagion throughout the U.S. financial system — as occurred in 2008 in the worst financial crash since the Great Depression. Janet Yellen, the U.S. Treasury Secretary, chairs F-SOC. Its members include the heads of every federal banking and Wall Street regulator, who meet regularly to assess any threats on the horizon that could lead to financial instability in the U.S. One of the data charts that OFR makes available both to F-SOC and the public to assess accelerating financial problems is its Financial Stress Index. OFR describes that index as follows: “The OFR Financial Stress Index … Continue reading →

By Pam Martens and Russ Martens: July 24, 2023 ~ Prior to Ben Bernanke being sworn in as Fed Chair on February 6, 2006, the United States had been through World War I, the Great Depression, World War II, the Vietnam War and the stagflation of the 1970s, without an explosion in the Fed’s balance sheet. But since Ben Bernanke, Janet Yellen and Jerome Powell have, in turn, sat at the helm of the Federal Reserve, there has been unprecedented growth in the Fed’s Balance Sheet. For example, from June 1960 to August 1990, the Fed’s balance sheet increased from $53 billion to $309 billion – an increase of 483 percent in 30 years. But during the tenures of Bernanke, Yellen and Powell, the Fed’s balance sheet has exploded from $805 billion in February 2006, when Bernanke took his seat as Fed Chair, to the current reading last Wednesday, July 19, … Continue reading →

By Pam Martens and Russ Martens: June 27, 2023 ~ Between March 10 and May 1 of this year, three of the largest bank failures in U.S. history occurred. On March 10 the Federal Deposit Insurance Corporation (FDIC) seized Silicon Valley Bank after $42 billion in deposits had exited the bank the day prior with another $100 billion queued up to leave the next day – meaning it was possible for a federally-insured bank to lose 85 percent of its deposits in the span of 48 hours in the digital age. (For a closer look at what was going on at Silicon Valley Bank, see our report: Silicon Valley Bank Was a Wall Street IPO Pipeline in Drag as a Federally-Insured Bank; FHLB of San Francisco Was Quietly Bailing It Out.) Two more bank failures followed in short order: Signature Bank on March 12 and First Republic Bank on May 1. … Continue reading →

By Pam Martens and Russ Martens: May 25, 2023 ~ Unlike his three immediate predecessors who chaired the Federal Reserve (Janet Yellen, Ben Bernanke and Alan Greenspan), who all had doctoral degrees in economics, the current Fed Chairman, Jerome Powell, has a law degree from Georgetown University. Given his legal education, one might have expected that when Fed Chair Powell became aware of the largest trading scandal in the Fed’s history in September of 2021, he would have done his legal due diligence to determine where to refer the matter for investigation. While multiple Wall Street watchdogs called for Powell to refer the investigation to the U.S. Department of Justice and the Securities and Exchange Commission – which conduct all legitimate insider trading investigations involving publicly-traded stocks — the Fed instead referred the investigation on October 4, 2021 to the Federal Reserve Board’s own Inspector General, who is appointed by the … Continue reading →

By Pam Martens and Russ Martens: May 15, 2023 ~ If you have been following the banking crisis, you have likely read at least a dozen times that on March 12 federal banking regulators, with the consent of the U.S. Treasury Secretary Janet Yellen, invoked the “systemic risk exception” in order to protect both insured and uninsured depositors at the two banks that failed in March – Silicon Valley Bank and Signature Bank. That’s why there were gasps of shock on Saturday evening at around 5:30 p.m. when the Wall Street Journal (paywall) published the stunning news that depositors in the Cayman Islands’ branch of Silicon Valley Bank had their deposits seized by the Federal Deposit Insurance Corporation (FDIC), which they are unlikely to ever see again. As Wall Street On Parade has previously reported, under statute, the FDIC cannot insure deposits held on foreign soil by U.S. banks. What it … Continue reading →

By Pam Martens and Russ Martens: April 24, 2023 Give First Republic Bank an A+ for arrogance and an F for its ability to hold on to its customers’ deposits, despite all that incessant talk about how loyal they are. The A+ for arrogance comes from the bank’s refusal to take even one question from reporters or bank analysts on today’s first quarter earnings call. The call began at 4:30 p.m. ET and lasted approximately 12 minutes. It was heavy on spin. For example, a big effort was made to dress up the amount of deposits the bank still had on hand at the end of the first quarter, which is necessary if anyone is to believe the narrative that it has “retained 97 percent of client relationships” over the quarter. (The relationships may, indeed, still be there in some fashion but deposits have flown the coop.) The hard numbers for … Continue reading →

By Pam Martens and Russ Martens: April 24, 2023 All of those pundits who have written over the past two weeks that the banking crisis is over, have failed to persuade the big credit ratings agency, Moody’s. Last Friday, Moody’s downgraded the credit ratings of 11 banks and put another five banks on negative watch – all in one day. And, for good measure, it downgraded the entire U.S. banking system from “Very Strong –” to “Strong +.” While not mentioning the Federal Reserve directly, the Moody’s downgrade of the U.S. banking system seemed to point directly at the Fed’s unrelenting interest rate hikes. Moody’s wrote: “Moody’s has lowered the macro profile of the US banking system to ‘Strong +’ from ‘Very Strong –.’ The change in funding conditions reflects rising asset liability management challenges at US banks. Specifically, the banking system faces rising funding and profitability pressures related to the … Continue reading →

By Pam Martens and Russ Martens: April 17, 2023 On April 11, Wall Street On Parade ran this headline: Fed Report: Largest 25 U.S. Banks Have Shed $700 Billion in Deposits Over Past Year. Using deposit data directly from the Federal Reserve’s weekly H.8 report, we documented that contrary to the misleading reporting in the mainstream business press, it wasn’t the regional banks that were losing the bulk of deposits in the U.S., with the biggest banks the beneficiaries, it was actually the biggest banks that were dramatically shedding deposits. We explained as follows: “The reality is that the 25 largest domestically-chartered commercial banks in the U.S. have been bleeding deposits for most of the past 12 months, shedding more than $700 billion in deposits between April 13, 2022 and March 29, 2023. To put that in even sharper focus, all U.S. domestically-chartered commercial banks have lost a total of $970 billion during … Continue reading →

By Pam Martens and Russ Martens: April 4, 2023 ~ The New York Times has been able to fly below the radar in terms of its insufferable ability to muck up the financial system of the United States and then canonize its aiders and abettors with puff pieces. It was none other than the New York Times that repeatedly used its editorial page to advocate for the repeal of the Glass-Steagall Act, which had protected the U.S. financial system from crisis for 66 years until its repeal under the Wall Street friendly Bill Clinton administration in 1999. It took only nine years after its repeal for the U.S. financial system to crash in 2008, requiring the largest public bailout in U.S. history. We’re now in banking crisis and bailout 3.0. The 1933 Glass-Steagall Act was passed by Congress at the height of the Wall Street collapse that began with the 1929 … Continue reading →

By Pam Martens and Russ Martens: March 21, 2023 ~ Jamie Dimon is the Chairman and CEO of JPMorgan Chase, the largest bank in the U.S., which is also ranked the riskiest global bank by its regulators. But instead of getting his own house in order in the midst of a banking crisis, Dimon has been peculiarly focused elsewhere. Over the past five days, Jamie Dimon’s legions of publicists have been burning up the phone lines with reporters, pushing the narrative that Jamie Dimon is some kind of financial wizard who needs to have a seat at the table to save the regional bank, First Republic Bank. (Scroll down here to see the exhaustive public relations effort that has gone into this narrative.) Last Thursday, news hit the wire services that Dimon had lined up 11 banks willing to place $30 billion in uninsured deposits into First Republic Bank. JPMorgan Chase, … Continue reading →