Search Results for: is the new york fed too conflicted

By Pam Martens and Russ Martens: January 12, 2018 On Wednesday, the House Financial Services Committee held a hearing on a topic of critical importance to all Americans: restructuring the Federal Reserve into a modern day central bank instead of a captured regulator controlled by the very banks it purports to supervise. Dean Baker, the Senior Economist at the Center for Economic and Policy Research, presented an important assessment of reforms needed at the Fed but you will be hard pressed to find any mainstream media coverage of his testimony. Instead, President Trump’s characterization yesterday of Haiti and African nations as “sh**hole countries” is dominating the news. How much critical work is falling by the wayside because mainstream media, dependent on ratings, elects to pursue only the most sensational stories – which they have no shortage of finding under President Trump. Congress began its latest push to reform the Federal … Continue reading →

  By Pam Martens and Russ Martens: August 3, 2017 The Federal Reserve Board of Governors is supposed to have a roster of seven Governors. It currently has four. Equally alarming, it lists just two members serving on each of its eight committees. One Fed Board Governor, Lael Brainard, is listed as one of the two members on six of the eight committees, or 75 percent of all committees. Governor Jerome Powell sits on five of the eight committees, or 63 percent of all committees. The Fed’s Committee on Supervision and Regulation consists of just Powell and Brainard. And yet, this is what the Fed’s 2015 Annual Report describes as the institutions the Fed supervises: 4,922 Bank Holding Companies 442 Domestic Financial Holding Companies 470 Savings and Loan Holding Companies 839 State Member Banks 154 Foreign Banks Operating in the U.S. Along with other entities per the graph above. There … Continue reading →

By Pam Martens and Russ Martens: January 13, 2017  Last night the Federal Reserve convened a Town Hall meeting via webcast with K-12 teachers and college educators of economics and history. Federal Reserve Chair Janet Yellen delivered a speech and then took a series of questions from teachers. It was during the Q&A period that Yellen gave a sobering assessment of the long-term prospects for the U.S. At numerous points, Yellen echoed the income inequality themes that Senator Bernie Sanders raised repeatedly at his rallies around the country during the presidential primaries. When asked about the biggest obstacles to the U.S. economy over the short and long term, Yellen said she did not have serious concerns over the short term but was worried about the longer term. In addition to productivity concerns, Yellen stated: (See video clip below.)  “We have seen over many decades now that the returns – the wages … Continue reading →

By Pam Martens and Russ Martens: November 7, 2016 Yesterday, at 4:33 p.m., we checked at the digital front page of CNN to see how it was delivering the news that FBI Director James Comey had sent yet another letter to Congress (on a Sunday, no less). The letter indicated that the FBI had reviewed the additional emails from the private server of Hillary Clinton that were found on sext-addict Anthony Weiner’s laptop and that it had not changed its conclusions that Comey had expressed in his July statement. The July announcement from Comey found that Clinton had been “extremely careless” by transmitting information classified as Top Secret and Secret over a non secure server in the basement of her New York home while serving as Secretary of State in the Obama administration but that the investigation had concluded with no recommendation to charge her with any crime. The statement … Continue reading →

By Pam Martens and Russ Martens: August 18, 2016 Since the Wall Street crash in 2008 crippled the U.S. economy, Congress has played the role of a spectator at a big league baseball game – munching on popcorn and licking its greasy fingers soiled with corporate campaign loot – as the real players on the field, the Federal Reserve, controlled the action. The above chart shows the steady erosion of Capacity Utilization in the U.S. since Congress surrendered its job to the deeply conflicted Fed. The chart comes courtesy of the Federal Reserve Bank of St. Louis, which defines Total Industry Capacity Utilization this way: “the percentage of resources used by corporations and factories to produce goods in manufacturing, mining, and electric and gas utilities for all facilities located in the United States (excluding those in U.S. territories).” In November 2007, prior to the onset of the crash, Capacity Utilization … Continue reading →

By Pam Martens and Russ Martens: June 14, 2016  The UK’s largest newspaper, The Sun, with a daily print run of 1.7 million, has delivered a harsh indictment on its front cover today on continuing to allow European central planners and global bankers to run the UK by edict. UK citizens will vote on June 23 on whether to leave the European Union, a vote called Brexit, short for British Exit. The UK’s Guardian newspaper is reporting that two ICM polls, one conducted online and one by telephone, showed 53 percent support for leaving versus 47 percent for remaining in the EU. The message should serve as a sharp warning to Americans, who have allowed their central bank, the Federal Reserve, to march to the beat of the Wall Street bankers’ edicts while achieving catastrophic results for the country and its citizens. Since the Wall Street crash of 2008, enabled … Continue reading →

By Pam Martens and Russ Martens: May 10, 2016  On May 1, William Dudley, the President of the New York Fed delivered a speech to the Atlanta Fed’s 2016 Financial Markets Conference.  Dudley, who was previously hauled before Congress to examine his Wall Street cronyism, spent two-thirds of his talk meandering around the academic nuances of liquidity in a stressed market and then zeroed in for the kill. Dudley wants to extend the powers of the Federal Reserve as the lender of last resort beyond just banks to (wait for it) include broker-dealer stock trading operations. Under that scenario, Bernie Madoff’s market-making operation (that was also a fraud according to the Madoff Trustee Irving Picard) might have been borrowing from the Fed during the crisis of 2008. Maybe Madoff could have even borrowed enough from the Fed to still be operating. Dudley’s exact words from the speech posted at the … Continue reading →

By Pam Martens and Russ Martens: February 9, 2016  Tomorrow, Janet Yellen will scurry over to the Rayburn House Office Building to give her semi-annual testimony to the House Financial Services Committee, now under the control of a deeply paranoid Republican majority when it comes to the Federal Reserve. (Not that some of that paranoia isn’t justified.) There is no question that Yellen will face hostile questioning from Republicans on the Committee, as she has in the past, although the questions tend to venture far afield from the real financial threats to U.S. stability. Most Democrats, on the other hand, are so wedded to holding up the Dodd-Frank financial reform legislation as their grand achievement after the 2008 crash that they refuse to look out the window and see the equity capital of the Wall Street mega banks currently in a death spiral as the same banks invent ever more … Continue reading →

By Pam Martens and Russ Martens: June 24, 2015 By any measure, the taxpayer bailouts and Federal Reserve loans of more than $13 trillion infused into the banking system during and after the 2008 financial collapse eclipse any other period in U.S. history. A growing body of research now suggests that these bailouts have set us up for ever greater episodes of moral hazard. Kartik B. Athreya, writing for the Richmond Fed, has described moral hazard this way: “As for implicit guarantees as a source of systemic risk, the idea is this: Any belief among financial market participants especially creditors, that they will be made whole by the public in the event of the failure of the assets they finance (i.e., that they will be ‘bailed out’) will lead them, all else equal, to (i) take greater risks, even if that means becoming ever more opaque or interconnected, and (ii) … Continue reading →

By Pam Martens and Russ Martens: May 14, 2015 According to high priced media real estate, JPMorgan Chase and Citigroup are set to plead guilty as soon as next week to criminal charges brought by the U.S. Justice Department for colluding with other banks in the trading of foreign currencies, known on Wall Street as Forex. Guilty pleas are also expected by Royal Bank of Scotland and Barclays, while UBS, which cooperated early on in the probe, may receive a different charge. What has not garnered any media attention, however, is the unseemly role that the perpetually blindfolded regulator, the New York Fed, has played behind the scenes as two of the nation’s largest Wall Street banks head toward becoming admitted felons. Since January of 2014, the head of Foreign Exchange Trading at JPMorgan Chase, Troy Rohrbaugh, has served as the Chair of the Foreign Exchange Committee – a group … Continue reading →