By Pam Martens and Russ Martens: November 23, 2021 ~ Fed Chair Jerome Powell now finds himself in the same position as Morgan Stanley’s Howie Hubler and JPMorgan’s Bruno Iksil: he’s got a big trade on and no exit plan. The problem for the U.S. economy is this: Hubler and Iksil were gambling with billions of dollars. Powell is gambling with trillions of dollars. Powell’s Fed has effectively become the Whale in the U.S. debt market. Powell was last sworn in as Fed Chair on February 5, 2018. Five days earlier, the securities held on the Fed’s balance sheet totaled $4.2 trillion. As of last Wednesday, that figure stood at $8.179 trillion, thanks to Powell’s endless purchases of U.S. Treasury securities and agency mortgage-backed securities (MBS). Making this situation even more dicey, the Fed bought these debt securities with money it creates out of thin air. The U.S. taxpayer is on … Continue reading →

By Pam Martens and Russ Martens: November 22, 2021 ~ We have been reading lawsuits filed against Wall Street firms in the federal district court in the Southern District of New York for more than three decades. We didn’t think that we could still be shocked by what victims of Wall Street’s abuses tell the court. But the lawsuit filed on November 11 by Shaquala Williams against JPMorgan Chase contains allegations that are both stunning and unprecedented in our experience. Williams is an attorney who formerly worked in compliance at JPMorgan Chase. Part of her role was to make sure that the bank was in compliance with a non-prosecution agreement it had signed with the Justice Department in 2016. The Justice Department had charged in 2016 that JPMorgan’s Asia subsidiary had engaged in quid pro quo agreements with Chinese officials to obtain investment-banking business and had falsified internal documents to cover up … Continue reading →

By Pam Martens and Russ Martens: November 19, 2021 ~ Yesterday, at 11:41 a.m., as Cornell Law Professor Saule Omarova sat before the Senate Banking Committee for her confirmation hearing to head of the Office of the Comptroller of the Currency (OCC), the regulator of national banks, Republican Senator Tom Cotton Tweeted the following: “Saule Omarova stole $214 (~$400 adjusted for inflation) from T.J. Maxx in 1995. She’s woefully unqualified to supervise the banking system.” Cotton’s Tweet links to a Fox News report which indicates that it has obtained the police report that shows that Omarova was 28 years old at the time of the arrest in 1995. The items she was reported to have taken without paying for them were “four pairs of shoes, two bottles of cologne, two belts and socks.” According to the report, she had left the store with the items when confronted by a security guard … Continue reading →

By Pam Martens and Russ Martens: November 18, 2021 ~ Last Thursday, Hannah Levitt of Bloomberg News published a report about a large trader exodus at JPMorgan Chase. She wrote: “…By this fall, many of the team’s heaviest hitters had gone. “The setting wasn’t some struggling investment bank. It was the equity derivatives desk inside the mighty JPMorgan Chase & Co. – one of many pockets of employee turnover that have erupted there in recent months, keeping the company’s recruiters busy.” That article was published at 8:00 a.m. By 11:00 a.m., Bloomberg News was finessing that negative article with another article by Brian Chappatta, which appeared to be an attempt to boost both the bank’s reputation as well as that of its Chairman and CEO, Jamie Dimon. Chappatta wrote: “Even with competitive pay and the bank’s prestige, departure rates in many of its businesses are reportedly up at least a few percentage points from pre-pandemic … Continue reading →

By Pam Martens and Russ Martens: November 17, 2021 ~ We recently read the report conducted by the Special Committee of the Board of Directors of Credit Suisse into how the bank had lost $5.5 billion when the Archegos family office hedge fund that was being financed by Credit Suisse and other Wall Street firms blew itself up this past March. One paragraph in particular caught our attention: “The Archegos-related losses sustained by CS are the result of a fundamental failure of management and controls in CS’s Investment Bank and, specifically, in its Prime Services business. The business was focused on maximizing short-term profits and failed to rein in and, indeed, enabled Archegos’s voracious risk-taking. There were numerous warning signals—including large, persistent limit breaches—indicating that Archegos’s concentrated, volatile, and severely under-margined swap positions posed potentially catastrophic risk to CS. Yet the business, from the in-business risk managers to the Global Head … Continue reading →

By Pam Martens and Russ Martens: November 16, 2021 ~ President Joe Biden is finding out the hard way that nominees for high office actually need to be vetted by multiple competent people. That clearly did not happen with Biden’s nominee, Saule Omarova, to head the Office of the Comptroller of the Currency (OCC), a federal agency that supervises national banks – those operating across state lines. Omarova’s radical statements and position papers will likely come into sharp focus at her confirmation hearing at 9:30 a.m. this Thursday before the Senate Banking Committee. Omarova’s unhinged views have Biden supporters scratching their heads as to how she ever survived the vetting process at the White House. (See Biden’s Nominee Omarova Has a Published Plan to Move All Bank Deposits to the Fed and Let the New York Fed Short Stocks.) Omarova, a Cornell University law professor, essentially has no filter for what … Continue reading →

By Pam Martens and Russ Martens: November 15, 2021 ~ The previous time a female lawyer who worked at JPMorgan Chase blew the whistle on frauds occurring inside the bank, the U.S. Department of Justice, along with other federal and state regulators, ended up charging the bank with selling toxic mortgage securities to investors and making JPMorgan Chase pay $13 billion to settle the charges. That female lawyer was Alayne Fleischmann, as Matt Taibbi detailed in a report for Rolling Stone in 2014. Taibbi summarizes the matter as follows: “Back in 2006, as a deal manager at the gigantic bank, Fleischmann first witnessed, then tried to stop, what she describes as ‘massive criminal securities fraud’ in the bank’s mortgage operations.” According to Fleischmann, who worked as a Transaction Manager at JPMorgan, her department was assigned with assuring that only good mortgage loans were securitized but, instead, under pressure from bosses, it waived in improperly … Continue reading →

By Pam Martens and Russ Martens: November 12, 2021 ~ When it comes to sycophants, Wall Street has no shortage of them willing to shill for its egregious private justice system called mandatory arbitration – a system which systematically guts the guarantee of a jury trial under the Seventh Amendment of the Bill of Rights. Think about that carefully, the industry that is serially charged with rigging markets and other felonious acts, is allowed by Congress to run its own privatized justice system. This is something one would expect to find in a banana republic, not in a country that lectures the rest of the world on democratic principles. Wall Street’s private justice system effectively locks the nation’s courthouse doors to both its workers and customers, sending the claims before conflicted arbitrators who do not have to follow legal precedent, case law or write legally-reasoned decisions. One of Wall Street’s serial … Continue reading →

By Pam Martens and Russ Martens: November 11, 2021 ~ Former Dallas Fed President Robert Kaplan made “over $1 million” trades in and out of S&P 500 futures throughout his tenure at the Dallas Fed, which began in September 2015 and ended with his resignation on September 27 of this year over his scandalous trading. Trading in S&P 500 futures is a market-timing device used by hedge funds and day traders. No individual with market-moving information at the Federal Reserve should ever use such a device. The U.S. stock market is open from 9:30 a.m. to 4:00 p.m. (ET) Monday through Friday. But S&P 500 futures trade around the clock during weekdays. The E-mini S&P 500 futures contract is the most popular and liquid S&P 500 futures contract. It can be leveraged by as much as 95 percent. The E-mini trades continuously from 6 p.m. Sunday night through 5 p.m. on … Continue reading →

By Pam Martens and Russ Martens: November 10, 2021 ~ According to Fed Chair Jerome Powell’s daily appointment calendar, he met privately with Jamie Dimon, the Chairman and CEO of JPMorgan Chase, from 3:00 to 3:30 p.m. on Thursday, September 30. JPMorgan Chase is the largest bank in the United States. It is supervised – badly – by the Federal Reserve. Just how bad is that supervision? JPMorgan Chase is the only U.S. bank to have been charged by the Justice Department with five felony counts since 2014 – admitting to all of them. But despite that unfathomable number of felony counts under the same Chairman and CEO, the Board of JPMorgan Chase didn’t sack Dimon. The Federal Reserve didn’t order JPMorgan Chase’s Board to sack Dimon either – not even after the bank was charged with rigging the U.S. Treasury market last year – the market that allows the U.S. … Continue reading →