By Pam Martens: November 3, 2021 ~ Yesterday, President Biden stunned moderates in his party by formally sending his nomination of Cornell Law Professor Saule Omarova to head the Office of the Comptroller of the Currency (OCC) to the Senate. The OCC regulates national banks, those operating across state lines, which include some of the largest banks in the nation, such as JPMorgan Chase, Bank of America, Wells Fargo, and Citigroup’s Citibank. Many folks believed that after Omarova’s recent law journal article became widely analyzed, she would remove herself from consideration or Biden would quietly ask her to step aside. As Wall Street On Parade revealed last week, Omarova’s 69-page paper published in the Vanderbilt Law Review in October, proposed the following: (1) Moving all commercial bank deposits from commercial banks to so-called FedAccounts at the Federal Reserve; (2) Allowing the Fed, in “extreme and rare circumstances, when the Fed is unable to … Continue reading →

By Pam Martens and Russ Martens: November 2, 2021 ~ The Office of Inspector General (OIG) for the Federal Reserve is conducting an investigation of the trading activities that led to the resignations of Dallas Fed President Robert Kaplan and Boston Fed President Eric Rosengren on September 27. The trading of other Fed officials may also be under the microscope. The OIG investigations are conducted by federal criminal investigators who have the power to “carry firearms, seek and execute search and arrest warrants, and make arrests without a warrant in certain circumstances.” The investigative findings can be referred to the U.S. Department of Justice for criminal or civil prosecution, if warranted. In the case of Kaplan, the matter belongs in the hands of the Department of Justice right now. Despite having ongoing access to market-moving information throughout 2020, Kaplan was trading in and out of S&P 500 futures in individual trades … Continue reading →

By Pam Martens and Russ Martens: November 1, 2021 ~ On Friday, the Dow Jones Industrial Average, S&P 500 Index and Nasdaq Composite, all closed in positive territory. But as the chart above indicates, mega banks on Wall Street closed in a sea of red ink. Citigroup (ticker, “C”) was among the big losers, closing down 1.72 percent, followed by Credit Suisse (CS) down 1.62 percent and Deutsche Bank (DB), down 1.31 percent. JPMorgan Chase (JPM), Barclays (BCS) and Goldman Sachs (GS) closed down less than 1 percent on Friday. The problem appeared to be the shifting shape of the U.S. Treasury yield curve. The longer out the yield curve an investor goes, the higher the yield – unless the yield curve flattens or inverts. That typically means that the Fed has started to hike interest rates, or is expected to begin hiking interest rates, and the market perceives that the … Continue reading →

By Pam Martens and Russ Martens: November 1, 2021 ~ Jes Staley, the CEO at the British global bank, Barclays, is stepping down immediately following a probe by British regulators into his ties with child sex trafficker, Jeffrey Epstein. Staley’s ties to Epstein occurred while he was an executive at JPMorgan Chase, the U.S. bank that has racked up five felony counts from the U.S. Department of Justice in the past seven years. Staley will be replaced as CEO by Barclays’ head of global markets, C.S. Venkatakrishnan, who himself came from JPMorgan Chase. Reuters reported early this morning that Staley’s abrupt departure came after Barclays was informed this past Friday of the, as yet unreleased, findings of a report by U.K. financial regulators’ into Staley’s characterization of his relationship with Epstein, who killed himself in jail in August 2019 while awaiting trial on charges involving child sex trafficking. On February 13 … Continue reading →

By Pam Martens and Russ Martens: October 29, 2021 ~ Reuters reported on Wednesday that Alec Baldwin and other producers of the low-budget western film, “Rust,” have hired the high-priced law firm, Jenner & Block, to investigate the fatal shooting of cinematographer Halyna Hutchins during a rehearsal on the set. The producers circulated a memo to the movie crew about the hiring of Jenner & Block the night before the Santa Fe Sheriff’s Department was scheduled to hold a press conference and announce its current findings. (See YouTube video below for the full press conference.) During that press conference, Sheriff Adan Mendoza revealed that a real gun, a Colt .45 revolver, was being used by Alec Baldwin at the time of the shooting. Mendoza said the gun had fired a live single round that killed Hutchins and then the bullet embedded itself into the shoulder of Director Joel Souza. (Souza was … Continue reading →

By Pam Martens and Russ Martens: October 28, 2021 ~ Congressman Brad Sherman (D-CA) knows a thing or two about accounting and law. He has a law degree from Harvard, where he graduated Magna Cum Laude. He has previously worked as a CPA and Certified Tax Law Specialist. Sherman chairs the House Subcommittee on Investor Protection, Entrepreneurship, and Capital Markets. At a Tuesday hearing on China’s myriad forms of market abuses, he made it crystal clear that investors are being hoodwinked when it comes to buying Chinese stocks. In his opening statement for the hearing, Sherman said this: “We see that China is able to pressure index funds to include Chinese companies but it’s not Chinese companies that are in the index funds. An index fund may choose to put the thousand biggest companies in the world in the index. But you can’t buy Alibaba. You buy Alibaba of the Cayman … Continue reading →

Pam Martens and Russ Martens: October 27, 2021 In 2012, short seller Citron Research released a 57-page report alleging fraudulent accounting at China Evergrande Group, the now teetering Chinese property development conglomerate that is causing severe anxiety in global markets. After spelling out six specific forms of accounting fraud that it believed to be taking place, the Citron report noted the following: “Meanwhile, Evergrande’s auditor, PricewaterhouseCoopers (Hong Kong office) has continued to provide an unqualified opinion.” The author of the Citron report, Andrew Left, received a 5-year trading ban in Hong Kong by the Hong Kong Market Misconduct Tribunal over what it alleged was a false report. On November 30, 2016, GMT Research, an accounting research firm that focuses on Asia, released a report titled: “China Evergrande: Auditors Asleep.” The report found that Evergrande had overcapitalized interest and classified its own commercial premises as an investment property. Yesterday, those previous … Continue reading →

Pam Martens and Russ Martens: October 26, 2021 This month, the Vanderbilt Law Review published a 69-page paper by Saule Omarova, President Biden’s nominee to head the Office of the Comptroller of the Currency (OCC), the Federal regulator of the largest banks in the country that operate across state lines. The paper is titled “The People’s Ledger: How to Democratize Money and Finance the Economy.” The paper, in all seriousness, proposes the following: (1) Moving all commercial bank deposits from commercial banks to so-called FedAccounts at the Federal Reserve; (2) Allowing the Fed, in “extreme and rare circumstances, when the Fed is unable to control inflation by raising interest rates,” to confiscate deposits from these FedAccounts in order to tighten monetary policy; (3) Allowing the most Wall Street-conflicted regional Fed bank in the country, the New York Fed, when there are “rises in market value at rates suggestive of a … Continue reading →

Pam Martens and Russ Martens: October 25, 2021 ~ This coming Thursday morning at 8:30 a.m., the Department of Commerce’s Bureau of Economic Analysis (BEA) will release its advance estimate for U.S. Gross Domestic Product (GDP) in the third quarter. Some folks are going to have a lot of egg on their face at 8:31 a.m. That’s because the Wall Street crowd of economists has remained wildly optimistic on how the U.S. economy behaved in the third quarter, despite an upsurge in the Delta variant of COVID-19 hobbling consumer confidence and spending. Most economists on Wall Street are forecasting real GDP growth in the third quarter of more than 3 percent. That Wall Street optimism has not been experienced by the number crunchers on the GDPNow Team at the Atlanta Fed. As of this morning, the AtlantaFed’s GDPNow crew can barely find a pulse for U.S. growth in the third … Continue reading →

Pam Martens and Russ Martens: October 21, 2021 ~ On Monday, October 18, the fearless Robert Kuttner at the American Prospect, broke the news that Fed Chairman Jerome Powell had sold between $1 million and $5 million of the Vanguard Total Stock Market Index Fund on October 1, 2020, the same day that Powell had been on four phone calls with Treasury Secretary Steve Mnuchin, who was coordinating the White House response to the financial crisis resulting from the pandemic. The story went viral and forced the Federal Reserve to offer a preposterously lame excuse for what was obviously a desire by Powell to reduce his exposure to the stock market, despite his having access to more insider information than any other human on the planet. The same day that Kuttner’s story ran, Mike Derby, a reporter for the Wall Street Journal, wrote that a Fed representative had characterized the … Continue reading →