Search Results for: Federal Reserve

By Pam Martens and Russ Martens: November 12, 2019 ~ Later this afternoon, Neel Kashkari, the outspoken President of the Federal Reserve Bank of Minneapolis, will deliver the keynote address at a conference on “Wisconsin and the National Economy” at the Madison campus of the University of Wisconsin. Tomorrow, he’ll be taking questions at a Town Hall in the University of Wisconsin’s Student Union on the La Crosse campus. Given Kashkari’s recent remarks on his lack of sympathy for the whining New York bankers who are demanding a liquidity bailout from the Fed – and on their own terms – we’ll be watching closely to see what he has to say today and tomorrow. Last month Kashkari gave a harsh and candid interview with Yahoo! Finance (see YouTube video clip below) about the complaints from New York bankers that the New York Fed was tardy in riding to rescue the … Continue reading →

By Pam Martens and Russ Martens: November 11, 2019 ~ Since September 17 of this year, the central bank of the United States, the Federal Reserve, has been pumping hundreds of billions of dollars each week to unnamed trading firms on Wall Street. We know the loans are going to trading firms because the loans are being made to the 24 primary dealers (see list below) with whom the New York Fed conducts open market operations. (The list includes one foreign bank and 23 stock brokerage houses and investment banks.) The New York Fed has publicly disclosed that the loans are going to primary dealers but will not say which firms are getting the bulk of the money. The Fed did something very similar to this under a facility it called the Primary Dealer Credit Facility (PDCF) during the financial crisis. It kept the names of the firms getting the … Continue reading →

By Pam Martens and Russ Martens: November 10, 2019 ~ Jamie Dimon was interviewed by Lesley Stahl this evening on the CBS investigative news program, 60 Minutes. The gist of Dimon’s argument is that candidates for President, such as Senator Elizabeth Warren, should stop vilifying him simply because he’s “successful.” Dimon also wants the public to know that it’s “dead wrong” to think he’s not a “patriot.” Dimon is a bit more than “successful” when it comes to the pile of money he has accumulated. According to Forbes, Dimon is worth $1.6 billion. The bulk of that money has come from stock grants while serving as Chief Executive Officer of the largest bank in the U.S., JPMorgan Chase, since December 31, 2005 as well as Chairman of the Board since December 31, 2006. Unfortunately, there is a very substantive argument against Dimon being a patriot and a very persuasive argument … Continue reading →

By Pam Martens and Russ Martens: November 7, 2019 ~ This morning, Wall Street’s money spigot arm of the Federal Reserve, the New York Fed, paid out $35 billion in 14-day term loans to Wall Street’s trading houses. The problem was, this morning the banks wanted $41.15 billion or $6.15 billion more than the Fed was offering. That’s a very clear sign that liquidity remains tight on Wall Street and we have yet to enter the pivotal year-end period when banks try to dress up their books by dumping or parking their most toxic positions. Between the term loan and the overnight loan, the New York Fed paid out $115 billion this morning to unnamed securities firms on Wall Street. (The Fed won’t say who is doing all of this borrowing and Congress can’t summon the willpower to hold a hearing.)  According to the most recent schedule provided by the … Continue reading →

By Pam Martens and Russ Martens: November 6, 2019 ~ The Federal Reserve Bank of New York (New York Fed) is just one of the 12 regional Federal Reserve banks around the country. But it has amassed enormous powers for itself since the Federal Reserve was created in 1913. Three of those powers dwarf all others: the ability to create money electronically at the push of a button; the accepted right to meddle in the markets; and the supervision of some of the largest bank holding companies in America. After Wall Street blew itself up under the indulging and incompetent supervision of the New York Fed in 2008 and it was exposed that the Fed had secretly created $29 trillion in electronic money to bail out zombie banks – most of that funneled out by the New York Fed – most rational folks would have assumed that Congress would have … Continue reading →

By Pam Martens and Russ Martens: November 5, 2019 ~ The Fed is in deep fear, while also in deep denial, about what happened last December. Its fear is that it could happen again this December. Its denial is that its lax supervision of the Wall Street mega banks is largely responsible for the mess. The stock market news on December 24 of last year was not what folks want to be reading about on Christmas Eve. The Dow Jones Industrial Average had plunged 653 points on Christmas Eve and headline writers across major media were declaring the month to have been the worst December for stocks since the Great Depression. But the declines in the broader stock market averages paled in comparison to the December carnage that occurred in the share prices of the mega banks on Wall Street and, to the Fed’s consternation, the insurance companies that are … Continue reading →

By Pam Martens and Russ Martens: November 4, 2019 ~ David Dayen of American Prospect has a must-read article. The headline and subhead read: “JPMorgan Gets Back Into the Electricity Business: An El Paso, Texas, electric utility is being purchased by an investment fund with deep, undisclosed ties to the big bank.” Dayen is not buying into the idea that it’s an investment fund at JPMorgan that’s buying El Paso Electric, a publicly traded electric utility, but that the deal is simply being “laundered through an allegedly independent investment fund,” due to the fact that “48 executives of the investment fund are actually paid employees of JPMorgan….” Why wouldn’t JPMorgan Chase want to admit that it plans to make an outright purchase of an electric utility company serving 429,000 customers in Texas and New Mexico? For starters, the bank has been charged, and admitted to, three criminal felony counts within … Continue reading →

By Pam Martens and Russ Martens: November 1, 2019 ~ Fed Chairman Jerome Powell had a Greenspan moment on Wednesday during his press conference. He made several Goldilocks statements about the banks that are going to come back to haunt him just as former Fed Chairman Alan Greenspan’s Alice in Wonderland remarks to Congress in the leadup to the greatest financial crash since the Great Depression have now made him appear to have been either lying to Congress or dangerously out of touch. It took just a few moments for us to pull up some charts to disprove the statements made by Powell. Powell stated the following during the Q&A portion of the press conference: “So, we monitor financial stability risks very carefully all of the time. It’s what we do since the financial crisis, as I’ve mentioned before. Currently, we don’t see large imbalances. This long expansion is notable … Continue reading →

By Pam Martens and Russ Martens: October 31, 2019 ~ Yesterday, following the announcement of another 1/4 point interest rate cut by the Federal Reserve’s Open Market Committee, Fed Chairman Jerome Powell held a press conference at 2:30 p.m. It proved to be an embarrassing and shameful example of New York City-centric business journalism. Seven business journalists from leading business news outlets that cover Wall Street asked questions in the first 23 minutes of the press conference. Not one of these reporters asked about the liquidity crisis on Wall Street that has resulted in the Fed offering $690 billion a week to 23 Wall Street securities firms and one foreign bank as well as a newly launched “don’t call it QE4” operation by the Fed to buy up $60 billion a month in Treasury bills from Wall Street dealers. The Fed began its repo loan interventions on September 17 of … Continue reading →

By Pam Martens and Russ Martens: October 30, 2019 ~ There is growing evidence that the New York Fed, the Wall Street feeding tube team of the Federal Reserve Board of Governors, is using its massive new repo loan operations to securities firms (primary dealers) to foam the Wall Street runways to try to avoid a crash landing as money gushes out of hedge funds by the tens of billions of dollars. According to a report at eVestment, investors pulled $29.37 billion from hedge funds in the third quarter of this year, bringing the total year-to-date to an eyebrow-raising $76.86 billion. That’s more than twice the amount that was withdrawn in all of last year. Hedge funds are highly-leveraged, so $76.86 billion in withdrawals could translate into hundreds of billions of dollars of liquidations in stock and bond markets. The report further notes that this is the “sixth consecutive quarterly … Continue reading →