Search Results for: Federal Reserve

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 →

By Pam Martens and Russ Martens: October 28, 2019 ~  JPMorgan Chase is the largest bank in the United States with $1.6 trillion in deposits from more than 5,000 retail bank branches spread across the country. When it withdraws liquidity from the U.S. financial system, that has a reverberating impact.  According to the filings that JPMorgan Chase makes annually with the Securities and Exchange Commission (SEC), since 2013 JPMorgan Chase has spent $77 billion buying back its own stock. That includes the whopping $17.01 billion it has spent in just the first nine months of this year buying back its stock. But here’s the shocking news. According to its SEC filings, JPMorgan Chase is partly using Federally insured deposits made by moms and pops across the country in its more than 5,000 branches to prop up its share price with buybacks. The wording in the filing is as follows: “In … Continue reading →

By Pam Martens and Russ Martens: October 25, 2019 ~ Today would have been Mark Pittman’s 62nd birthday. Pittman died of a heart attack at age 52 on November 25, 2009 in the midst of a pitched court battle with the Federal Reserve to obtain data on its secret loans to Wall Street. Writing for Bloomberg News, Pittman was one of the preeminent chroniclers during the financial crisis of the Federal Reserve’s hubris in refusing to shed any light on what eventually turned out to be an astounding $29 trillion of money it created out of thin air to bail out Wall Street’s mega banks and their foreign bank derivatives counterparties. Pittman had appeared in the documentary, American Casino, produced by Leslie and Andrew Cockburn. In that documentary, the Cockburns brilliantly pieced together for the American people the wealth transfer scheme concocted by the mega banks on Wall Street, which … Continue reading →

By Pam Martens and Russ Martens: October 25, 2019 ~ Memories are apparently very short at the Securities and Exchange Commission (SEC). The SEC seems to have forgotten that a run on money market funds holding bank commercial paper set off a panic after the Lehman Brothers bankruptcy filing on September 15, 2008. The government had to step in and guarantee the funds. Despite those disastrous days, the SEC has allowed money market funds being sold in the U.S. to hold a staggering $642 billion in the instruments of foreign banks, as of September 30, 2019. It categorizes those instruments as: certificates of deposits, time deposits, sponsored asset-backed commercial paper, and repurchase agreements (repos) where the bank is the counterparty. On top of the $642 billion in the instruments of foreign banks, the money market funds are holding another $292 billion in the instruments of U.S. banks, bringing the total … Continue reading →

WSOP Staff: October 25, 2019 ~ Yesterday, the headline above appeared at CNBC. The headline writers there must be living in an alternative reality. Let us remind CNBC viewers what 2019 is actually shaping up to be: it’s the year that the highest priced stock in the price-weighted Dow Jones Industrial Average, Boeing, can’t figure out how to safely fly the plane, the 737 Max, that it has sold to airlines around the world. The stock charts of two of the biggest IPOs of the year, Uber and Lyft, look like crash landings themselves. Another much hyped IPO, WeWork, couldn’t achieve liftoff because its Chairman and CEO was engaging in shady self-dealings with the company. And yet, despite Adam Neumann’s disastrously failed management of his company, SoftBank paid him $1.7 billion to take a hike as thousands of about-to-be fired workers looked on in disgust. And, we should add, despite … Continue reading →

By Pam Martens and Russ Martens: October 24, 2019 ~ Yesterday the Federal Reserve Bank of New York (New York Fed) announced that the giant money spigot it turned on for Wall Street on September 17 would be growing exponentially beginning today. The New York Fed will now be lavishing up to $120 billion a day in cheap overnight loans to Wall Street securities trading firms, a daily increase of $45 billion from its previously announced $75 billion a day. In addition, it is increasing its 14-day term loans to Wall Street, a program which also came out of the blue in September, to $45 billion. Those term loans since September have been occurring twice a week, meaning another $90 billion a week will be offered, bringing the total weekly offering to an astounding $690 billion. It should be noted that if the same Wall Street firms are getting these … Continue reading →

By Pam Martens and Russ Martens: October 22, 2019 ~ From this past Friday evening through Sunday, if you clicked on any of the web pages at the New York Fed pertaining to the hundreds of billions of dollars it has been pumping out weekly to Wall Street’s securities firms since September 17, you saw the message below: We emailed the New York Fed’s media contact and asked why all of the other web pages at the New York Fed were working just fine but only its repo operation data and announcements had up and disappeared. We received no response. The web pages have since been restored with some tweaking that seems to have the intent of making this massive money spigot to Wall Street, for the first time since the financial crisis, appear to be just your ole run of the mill open market operation from your ole reliable … Continue reading →