Search Results for: JPMorgan

By Pam Martens and Russ Martens: September 25, 2020 ~ Refinitiv Lipper has been reporting fund flows into and out of the stock market for the past 18 years. According to its most recent report, for the week ended Wednesday, September 23, equity (stock) funds, including both equity mutual funds and equity Exchange Traded Funds (ETFs), have now seen a net outflow of money for the sixth straight week. This week’s outflow from equity funds totaled -$14.9 billion. That’s the largest outflow by far in the past six weeks. It brings the total net outflow from equity mutual funds and equity ETFs to a net outflow of $42 billion beginning with the week ending August 19. That may not sound like a lot of money in a $35 trillion (as of June 30, 2020) market, but it is if you focus on the word “net.” If you have a long-term … Continue reading →

By Pam Martens and Russ Martens: September 24, 2020 ~ Federal Reserve Chairman Jerome Powell’s oft repeated mantra this year – that the behemoth Wall Street banks “are a source of strength” in this economic crisis – is melting away faster than a snow cone in July, along with the share prices of these banks. So whom should Americans believe: The composite wisdom of the market or the opinion of a federal regulator whose supervision of these banks has been far from stellar. The market would seem to have spoken clearly on just how “strong” these banks are. Since the first trading day of the year, January 2,  to yesterday’s closing price, here’s the factual reality of just how much common equity capital these banks have bled: Citigroup is down a stunning 48 percent, losing almost half of its common equity capital; Bank of America has lost 35 percent; while … Continue reading →

By Pam Martens and Russ Martens: September 17, 2020 ~ At the time the Fed released the results of its bank stress tests in June, it announced that because of the pandemic and unprecedented economic downturn, it would require additional stress testing of the biggest banks later this year. This afternoon, the Fed released those plans. Among the various hypothetical scenarios that the banks will have to perform against, 13 of the banks with significant trading operations will have to consider what would happen if a major counterparty blew up. The banks that will have to submit outcomes under this scenario include: Bank of America, Bank of New York Mellon, Barclays US, Citigroup, Credit Suisse, Deutsche Bank USA, Goldman Sachs, HSBC, JPMorgan Chase, Morgan Stanley, State Street, UBS, and Wells Fargo. The Fed will release bank-specific results before the end of the year. All 34 banks will face two hypothetical … Continue reading →

By Pam Martens and Russ Martens: September 15, 2020 ~ The business media was abuzz yesterday with reports that two of Citigroup’s federal regulators – the Office of the Comptroller of the Currency and the Federal Reserve – are considering reprimanding the bank for failure to improve its risk management systems. Trust us: there is a lot more to this story than you’re reading about in the main stream press. Citigroup doesn’t do anything small. When it does something bad, it goes all in – sometimes even assigning a code name. Let’s start with the “Dr. Evil” trade. That was actually the code name that Citigroup traders assigned to an attempt to exploit a weakness in a European bond trading system. Citigroup was fined $26 million in 2005 by Europe’s Financial Services Authority for the trades. Citigroup employees gave another code name, “Buca Nero” – Italian for “Black Hole” – … Continue reading →

By Pam Martens and Russ Martens: September 12, 2020 ~  So far this year, the mega Wall Street bank, Citigroup, has lost 37 percent of its market value – outpacing peer banks like Morgan Stanley, Goldman Sachs, JPMorgan Chase and Bank of America. (See chart below.) Then there was the fat finger in August in the back office of Citigroup that wired $900 million by mistake to pay off the entire principal balance of a Revlon bond instead of making just the payment of interest on the bond. Citigroup is now embroiled in lawsuits with the Revlon lenders, attempting to get them to return the money. According to Institutional Investor, “a total of $526.4 million has yet to be returned” as of August 27. The lenders are refusing to return the funds to Citigroup on the basis that Revlon owed them the money anyway because Revlon had improperly changed the … Continue reading →

By Pam Martens and Russ Martens: September 9, 2020 ~ The mega banks on Wall Street joined the tech wreck yesterday as illustrated on the chart above. The selloff in these banks can be attributed to, primarily, the selloff in the price of crude oil – which suggests the banks will be forced to increase loan loss reserves as the threat of more bankruptcies among debt-strapped U.S. oil producers increases. Domestic crude oil, known as West Texas Intermediate or WTI, had a $41 handle on Friday on the Nymex. Yesterday, that turned into a $36 handle – a decline of 12 percent from Friday. A WTI handle below $40 is panic-time for U.S. independent oil producers who are deep in debt and struggling to avoid bankruptcy. The big summer driving season that was expected to boost crude demand was officially over the day after Labor Day. But, in fact, a … Continue reading →

By Pam Martens and Russ Martens: September 4, 2020 ~ There were ghosts of the dot.com bust of 2000 to 2002 on every trading screen yesterday. The Nasdaq composite index fell 4.96 percent to close at 11,458.10 but the carnage in many of the underlying stocks was far worse. Notably, 50 stocks in the tech-heavy Nasdaq dropped 9 percent or more yesterday, including some of this year’s highfliers. One of those highfliers was Zoom Video Communications (ZM). Zoom closed on the first day of trading this year at $68.72; flew to $457 by September 1; lost 9.97 percent yesterday to close at $381.32 – still showing more than a quintupling of its market value in a span of eight months. That stock has a nose-bleed-worthy price-to-earnings ratio of 474. While much of the focus has been on the bubble in the big tech names like Alphabet (parent of Google), Amazon, … Continue reading →

By Pam Martens and Russ Martens: September 2, 2020 ~  Members Exchange (MEMX), a brand new stock exchange, has announced that it will begin live trading of select stocks for the first time on September 21 with a full phase-in on September 29. Criminal histories are, apparently, no barrier to running a stock exchange in the United States to the deeply conflicted way of thinking of the Securities and Exchange Commission (SEC), which issued its approval to operate the exchange on May 5. Investors in the new stock exchange are some of the most serially-charged Wall Street banks, including JPMorgan, Goldman Sachs, and UBS, along with the hedge fund, Citadel Securities. BlackRock, which is up to its neck in the Federal Reserve’s deeply conflicted bailout programs, is also an investor, as is the high-frequency trading firm, Virtu Financial, and others. JPMorgan Chase has been criminally investigated by the U.S. Department … Continue reading →

By Pam Martens and Russ Martens: August 31, 2020 ~ The S&P 500 stock index set a new record high on Friday, closing at 3508.01 – the first time it has ever closed above 3500. In fact, the S&P 500 set a record high close every single day last week. Here’s the actual closing numbers: Monday, August 24: 3,431.28 Tuesday, August 25: 3,443.62 Wednesday, August 26: 3,478.73 Thursday, August 27: 3,484.55 Friday, August 28: 3,508.01 Refinitiv Lipper has been reporting fund flows into and out of the stock market for the past 18 years. According to Refinitiv Lipper, for the week ending Wednesday, August 26, stock (a/k/a equity) mutual funds and stock ETFs had a combined negative outflow of -$7.8 billion. For the week ending Wednesday, August 19, stock mutual funds and stock ETFs had a negative outflow of -$6.6 billion. Put the two weeks together and you have investors … Continue reading →

By Pam Martens and Russ Martens: August 13, 2020 ~ The Federal Reserve has thrown everything just short of the kitchen sink at propping up the mega banks on Wall Street – the same ones that were never prosecuted for their fraudulent issuance of mortgage securities and causing the worse economic crash since the Great Depression in 2008. (The Fed bailed the same banks out back then also – to the tune of $29 trillion in cumulative loans.) But yesterday’s market action suggests that something is definitely amiss. The S&P 500 index closed at 3380, just 7 points away from topping its all-time high of 3386 that it set on February 19 of this year. The Dow also gained 289.9 points on the day. But now look at the chart above. There was a sea of red in the Wall Street bank stocks. While the losses in Citigroup, Bank of America, … Continue reading →