By Pam Martens and Russ Martens: August 18, 2021 ~ Before daybreak on any business day in lower Manhattan, the glow of lights from Bloomberg terminals illuminate windows at 33 Liberty Street, home of the New York Fed. The New York Fed not only has its own trading floor with speed dials to the Wall Street trading houses, but it also has its own global markets intelligence gathering group, called simply the Markets Group. According to a previously released educational video featuring Karin Kimbrough, then the Director of Financial Stability Market Monitoring at the New York Fed – a position she held until November of 2014 — the traders at the New York Fed take turns coming in at 4:30 a.m. in order to get a jump on market intelligence by calling their contacts in London, Frankfurt and Japan. (See video below.) Kimbrough explains what kind of intelligence the traders and … Continue reading →

By Pam Martens and Russ Martens: August 17, 2021 ~ President Joe Biden is tapping insiders from the Federal Reserve Bank of New York for key financial posts in his administration. These insiders played key roles during the financial crash of 2008 or the repo loan crisis in the fall of 2019 or the pandemic-related financial crisis of 2020. One of them was around for all three. We’ll get to the specific names in a moment, but first some necessary background. The Federal Reserve Board of Governors is an independent federal agency whose Board members are appointed by the President of the United States. But the 12 regional Federal Reserve banks that are part of the Federal Reserve System are owned, outright, by commercial banks, thus making these Fed banks private entities. The New York Fed stands out because it is owned by some of the largest and most dangerous mega … Continue reading →

By Pam Martens: August 16, 2021 ~ As millions of struggling Americans face eviction this fall; as children are dying in hospitals from a raging pandemic; as his political party is facing a brutal fight in the upcoming midterms — what does former President Barack Obama do? He throws himself a lavish, celebrity-studded birthday bash at his $12 million waterfront mansion on Martha’s Vineyard with a sprawling dining tent potentially creating a super-spreader event. The party was held on Saturday evening, August 7. New York Times columnist, and Pulitzer Prize winner, Maureen Dowd, gave it the scathing review it deserved in this past Sunday’s print edition of The Times. In the article, Dowd quotes André Leon Talley’s take on the over-the-top soiree. Talley said “the Obamas are in Marie Antoinette, tacky, let-them-eat-cake mode. They need to remember their humble roots.” The brutal truth is that the Obamas have been in tacky, … Continue reading →

By Pam Martens and Russ Martens: August 13, 2021 ~ After stepping down as Fed Chair on February 3, 2018, Janet Yellen began a whirlwind of speaking engagements that netted her millions of dollars over the next two years. But when it came time to disclose those fees after she was nominated by President Biden to become Treasury Secretary, Yellen disclosed only the fees she had made in 2019 and 2020, not the millions she had made in fees in 2018. What Yellen did disclose showed more than $7 million in speaking fees, with the bulk of that coming from Wall Street banks, trading houses and hedge funds. As the news broke this past January about Yellen’s cash haul, Senior Reporter Jesse Eisinger of ProPublica Tweeted this: “Deeply troubling two-fisted money grab from banks by Janet Yellen. This is corruption, but isn’t called that because it’s so quotidian.” Eisinger added: “Sure, Yellen … Continue reading →

By Pam Martens and Russ Martens: August 12, 2021 ~ On July 29 the Federal Reserve released its Annual Report for 2020. The Appendix contains 13 statistical tables that would make most folks’ eyes glaze over. Table G.5A., however, is worthy of a glass of good wine, a comfy arm chair, and some serious musing. That table provides a 36-year history of, among other things, the Fed’s deployment of Repurchase Agreements (Repo Loans) at the outbreak of a crisis; its Loans and Other Credit Extensions; and its Securities Held Outright – which have exploded since the Fed adopted Quantitative Easing (QE) in 2008. QE is the Fed’s wonky expression for it buying up trillions of dollars in notes and bonds to push interest rates down to near zero, thus forcing money in search of a return into the stock market, which is majority-owned by the top 10 percent of the wealthiest … Continue reading →

By Pam Martens and Russ Martens: August 11, 2021 ~ When it comes to prosecuting the serial criminal cases arising out of Wall Street, there are two critical posts: the head of the Criminal Division at the Department of Justice and the U.S. Attorney for the Southern District of New York. (The Securities and Exchange Commission has only civil powers and, thus, conveniently, cannot bring criminal charges.) President Biden failed to properly vet his nominee, Kenneth Polite, to head the Criminal Division, “despite screaming red flags on his financial disclosure form.” Polite was confirmed for the job by the U.S. Senate on July 20. Senators asked zero questions about these financial red flags. Yesterday, President Biden announced that he was nominating Damian Williams to become the U.S. Attorney for the Southern District of New York, the office that brings (or fails to bring) the majority of criminal cases involving Wall Street … Continue reading →

By Pam Martens and Russ Martens: August 10, 2021 ~ On July 21, 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) became the law of the United States. Its promise to Americans was that it would reform the corrupt practices on Wall Street that had led to the worst financial collapse in 2008 since the Great Depression and the largest taxpayer bailout of Wall Street in history. But here we are, 11 years later, with every one of those corrupt practices in full display at the Wall Street mega banks today. Losses from wild derivative bets check. Trading for the house (proprietary trading), check. Secret bailouts from the Fed, check. Credit Default swaps, check. The continuance of the private justice system on Wall Street, check. Banks paying rating agencies for ratings, check. Banks giving insanely leveraged loans to hedge funds, check. And if we wanted to find the … Continue reading →

By Pam Martens and Russ Martens: August 9, 2021 ~ On August 4, the Chairman of the Securities and Exchange Commission, Gary Gensler, sat for an interview on CNBC. During that interview, Gensler mentioned that his Twitter followers were posting comments on his Twitter page about Dark Pools. Specifically, this is what Gensler said: “We are taking a real close look at market structure and I recently started, you know, engaging on Twitter and to some of those Twitter followers that are writing about Dark Pools, we are looking very closely at this market structure that so many of our orders, retail public orders are not going to the lit markets but are going to internalizers, going to wholesalers, were taking the retail public’s trades rather than sending them to the stock exchanges.” Dark Pools are opaque, thinly regulated trading platforms that function much like private stock exchanges operating inside the … Continue reading →

By Pam Martens and Russ Martens: August 6, 2021 ~ When it comes to the top watchdog of trading on Wall Street, the Securities and Exchange Commission (SEC), that dog can’t hunt. It’s not that the career professionals at the SEC haven’t tried to hunt, it’s that when they get too close to ensnarling some powerful person on Wall Street, they are told to stand down. Having a Wall Street defense lawyer at the helm of the SEC under both Presidents Obama and Trump certainly hasn’t helped the matter. (See here and here.) The jury is still out on President Biden’s SEC Chair, Gary Gensler, who just took office on April 17. (It should be noted, however, that the case described below was settled by the SEC after he took office.) With that as a backdrop, consider the press release and order that the SEC released on June 29 against Neovest … Continue reading →

By Pam Martens and Russ Martens: August 5, 2021 ~ Robinhood is the poster boy for the craziest, most unregulated stock market era since 1929. That one ended in tears. This one will also. Robinhood is the trading app used by millions of young, inexperienced retail investors to trade stocks and options on their mobile phones. The company went public last Thursday on the Nasdaq stock market (the wonderful folks who brought us the dot.com crash in 2000). Robinhood closed the trading week last Friday with a share price of $35.15 – an embarrassing 7.5 percent below its IPO price of $38. Curiously, so far this week, through Wednesday’s closing price of $70.39, the stock has soared 100.256 percent from Friday’s closing price. In an efficient, regulated stock market that is capable of engaging in its core function of price discovery, Robinhood would not have doubled in price in three trading sessions. … Continue reading →